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This graph is sourced to a partisan lobbying group called Citizens for Tax Justice (ITEP is the group's "think tank" arm). It purports to show that the top 1% pay a lower total tax rate than the preceding 19%, but it has no corroboration and its internal federal component is dramatically contradicted by the federal effective rates given by the Tax Policy Center and Congressional Budget Office.
That's a huge difference that persists over time, and isn't a one year fluke. Here's a CBO breakdown over time that consistently shows the top 1%'s effective federal income tax rate to be around 30%. The Tax Policy Center is also a liberal leaning group, a joint creation of the Urban Institute and Brookings Institute, but it's prominent, widely cited, and its hard incidence numbers are generally respected across political lines. The CBO is obviously also much more prominent and widely cited than the CTJ is. That the TPC and CBO independently derive figures that closely track each other time reinforces their credibility as reliable sources. The Tax Foundation, the conservative equivalent of the TPC, is a long established, respected, widely cited think tank that has directly criticized CTJ/ITEP's methodology in producing the reports used as the graph source. CTJ is the outlier here, and also happens to be less prominent and more aggressively partisan than the ideologically diverse outfits that contradict it. At the very least its results are hotly disputed, and it doesn't warrant the implied authority of a visual image here. VictorD7 ( talk) 18:31, 19 May 2014 (UTC)
I've seen economists quote the CTJ figures, so AFAIK, it is a reliable source. What this discussion is missing is that the tax laws changed in 2013. Remember the expiry of the Bush tax cuts (originally in 2010), the ' fiscal cliff' and the tax compromise hammered out in late-2012? That compromise raised taxes on the high end. (See here for pretty chart.) I'm guessing that the discrepancy between the sources is largely because one set is looking at current law (after fiscal cliff), and another set is looking at tax incidence during the Bush tax cut years. LK ( talk) 09:54, 20 May 2014 (UTC)
Despite some different reasoning, there seems to be strong support for removing the CTJ chart, so I'll go ahead and do so. VictorD7 ( talk) 08:32, 21 May 2014 (UTC)
For editors who are assuming that income inequality is a "problem," the specifics of why it is a problem needs to be laid out a bit better. This might include a sentence or two from the linked article income inequality. It could be that simple.
Quotes could (therefore) be improved by including people who give reasons for their statements and don't just assume a given outcome is obvious for obvious reasons. On a different topic, for example, "I think the speed limit on state highways should be increased/decreased because tourists are avoiding our state because the speeds they travel are too slow/there are too many fatal accidents attributed to high speeds." Just opining that speed levels should be increased or decreased seems puerile and ineffective IMO. Which is why we should probably not quote politicians! They try to be deliberately vague for credible deniability reasons. Student7 ( talk) 14:29, 27 May 2014 (UTC)
User:Arthur Rubin deleted the addition of Wage theft to "See also", remarking, "Relationship? I see none". The second sentence of that article says, "Wage theft, particularly from low wage legal or illegal immigrant workers, is common in the United States." It seems obvious to me that reducing the actual wages of people already paid very little and transferring that money to those more highly paid increases income inequality. This suggests to me that "wage theft" is appropriate to add to "See also", and I don't understand why User:Arthur Rubin deleted it. Either User:Arthur Rubin or I is missing something -- and probably both. Could someone else please help with this? Thanks, DavidMCEddy ( talk) 06:31, 2 September 2014 (UTC)
Target text: "Scholars and others differ as to the causes, and the significance of the trend." and "Education and increased demand for skilled labor are often cited as causes" The reference sources for the reason for income inequality points to the CIA. It is more appropriate to get more scholarly sources. http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#cite_note-CIA._.28June_14.2C_2007.29._United_States:_Economy._World_factbook.-23
— Preceding unsigned comment added by 66.205.167.110 ( talk • contribs) 22:10, 6 September 2014 (UTC)
The following was moved to the talk page for discussion:
There are several key aspects of income inequality analyses, particularly those of economists Thomas Piketty and Paul Krugman, that have been proven to be inconsistent and/or flawed. [1] For example, one of their assertions is that wealthy Americans earn a higher rate of return on investment than lower income peers, and will ultimately create a 'patrimonial-capitalist' society controlled by only a few ultra-wealthy families, much like nineteenth-century Europe. Krugman has described it as a new "Gilded Age". "Piketty points to the Forbes 400 ranking of the wealthiest Americans from 1987 to 2013. He shows that the top 0.000001% of Americans—roughly the top 45 people on the Forbes list—earn about 6.8% on their money, while the average return on wealth is just 2.1%. Critics point out that income inequality proponents wrongly assume that this is a static list of wealthy Americans who remain rich. In reality, there has been a great deal of turnover on the Forbes 400; only 35 people from the original 1982 list remain today. Many have fallen off as a result of heavy spending, large-scale philanthropy, and bad investing. The current Forbes 400 is now primarily made up of newly wealthy business owners, not heirs and heiresses. The University of Chicago’s Steve Kaplan and Stanford University’s Joshua Rauh note that 69% of those on the list are first generation wealth creators. That figure has risen dramatically since 1982 when it stood at 40%. So it’s likely that rising income inequality is not the product of inheritance, as Piketty, Krugman, and others assume, but rather the result of entrepreneurs like Bill Gates and Jeff Bezos being paid for their ingenuity." [2] Thus, capitalism does not contribute to an inherited-wealth stagnation and consolidation, but instead promotes the opposite ... a vigorous, ongoing turnover and creation of new wealth. [3] [4]
One of the primary recommendations made by income inequality proponents is central planned/ state interventionism. Abundant research, as well as empirical evidence, has demonstrated that income inequality also exists in statist (socialist) countries. However, the nature of income inequality in statist countries is driven by political, rather than economic factors ... as articulated in a recent analysis entitled "The Hidden Inequality In Socialism" (David Henderson-Naval Postgraduate School, Hoover Institution, Stanford University and Tamas Rozsas-Ministry of Economy and Transport, Department of Information Technologies and Statistics, Budapest, Hungary); "The causes of income inequality are more important than the degree of income inequality itself. In a socialist economy, income inequality hinges for the most part on differences in political power, political connections, and loyalty to the government. To better one’s economic condition in a socialist economy, therefore, one must become politically connected or, at least, must display loyalty to the government. Also, because people have little incentive to produce valuable goods in a socialist economy, most people claw for improved position in a zero-sum game in which one person’s gain is another’s loss. In a market economy, by contrast, income inequality reflects differences in productive ability for the most part. The way to better oneself economically in a market economy, therefore, is to become more productive—that is, to contribute more to the wealth of one’s fellow human beings in return for pecuniary rewards. Markets are positive-sum games. Bill Gates and Michael Dell are extraordinarily wealthy not because of their political connections but because they have produced goods that consumers value. Inequalities in a market economy, therefore, serve a useful function, giving people incentives to work harder, study more, and take sensible risks, thereby contributing to other people’s well-being. Further research should focus on the causes of inequality instead of its degree, with special attention on corruption and income redistribution through government transfers." [5] [6]
In 2012, National Affairs journal published the following, "The implicit assumption behind the case for the injustice of income inequality is that the wealthy are the reason why the poor are poor, or at least why they cannot escape their poverty. If this claim were true, it would be much easier to connect income inequality with injustice, and so to justify a redistributionist agenda. Yet this assumption rests on another economic premise that itself is highly dubious: the idea that income is a zero-sum game. Moral critics of inequality often portray total national income as if it were a pie: There is only a fixed amount to go around, they suggest, so if someone's slice gets bigger, another person's must get smaller. Much of the moral debate about income inequality seems to rest on this zero-sum theory. As Kevin Drum of Mother Jones magazine put it last year, "This income shift is real. We can debate its effects all day long, but it's real. The super rich have a much bigger piece of the pie than they used to, and that means a smaller piece of the pie for all the rest of us." [7] In a functioning market economy, however, the total amount of income is decidedly not static; economic exchange is not a zero-sum game." This is corroborated by a Pew Charitable Trust report released in 2009 entitled "Ups and Downs: Does the American Economy Still Promote Upward Mobility?" and by a 2007 report by the Congressional Budget Office, finding that both middle and lower income Americans experienced absolute and inflation-adjusted economic gains between 1979 and 2005, thus dispelling the notion that increased earnings of high-income workers generally cause some people to be poor or prevent them from improving their economic status. [8] [9] [10]
The Census Bureau ranks all households by household income and then divides this distribution of households into quintiles. The highest-ranked household in each quintile provides the upper income limit for each quintile. Comparing changes in these upper income limits over time for different quintiles reveals that the income of wealthier households has been growing faster than the income of poorer households, thus giving the impression of an increasing “income gap” or “shrinking middle class.” One big problem with inferring income inequality from the census income statistics is that the census statistics provide only a snapshot of income distribution in the U.S., at a single point in time. The statistics do not reflect the reality that income for many households changes over time—i.e., incomes are mobile. For most people, income increases over time as they move from their first, low-paying job in high school to a better-paying job later in their lives. Also, some people lose income over time because of business-cycle contractions, demotions, career changes, retirement, etc. The implication of changing individual incomes is that individual households do not remain in the same income quintiles over time. Thus, comparing different income quintiles over time is like comparing apples to oranges, because it means comparing incomes of different people at different stages in their earnings profile. [11]
In addition, there have been a number of other challenges to the integrity and interpretation of the data presented in many income inequality analyses by economists and scholars. [12] [13] [14] [15] [16]
The Brookings Institution's Gary Burtless published findings (using Congressional Budget Office data) in a 2014 report that contradicts accepted theories of income inequality, "Some crucial findings of this new study may come as a surprise, especially to people who believe incomes of the poor and middle class have stagnated since the turn of the century while incomes at the top have soared. The CBO’s latest numbers show the opposite is true. Since 2000 pre-tax and after-tax incomes have improved among Americans in the bottom 90% of the income distribution. Among Americans in the top 1% of the distribution, real incomes sank. (Chart 1)" These results reflected recent economic conditions, when the economy suffers the wealthiest absorb the greatest loss of income. However, when the economy is strong, they stand to gain the most. Between 2000 and 2010, the wealthiest took losses while other quartiles did not.
One reason that many observers fail to recognize these lower- and middle-income gains is that the nation’s most widely cited income statistics do not capture key information. "A commonly used indicator of middle class income is the Census Bureau’s estimate of median household money income. The main problem with this income measure is that it only reflects households’ before-tax cash incomes. It fails to account for changing tax burdens and the impact of income sources that do not take the form of cash. This means, for example, that tax cuts in 2001-2003 and 2008-2012 are missed in the Census statistics. Even worse, the Census Bureau measure ignores income received as in-kind benefits and health insurance coverage from employers and the government. By ignoring such benefits as well as sizeable tax cuts in the recession, the Census Bureau’s money income measure seriously overstated the income losses that middle-income families suffered in the recession. New Congressional Budget Office income statistics are beginning to show the growing importance of these items. In 1980, in-kind benefits and employer and government spending on health insurance accounted for just 6% of the after-tax incomes of households in the middle one-fifth of the distribution. By 2010 these in-kind income sources represented 17% of middle class households’ after-tax income. (Chart 4)"
"The income items missed by the Census Bureau are increasing faster than the income items included in its money income measure. What many observers miss, however, is the success of the nation’s tax and transfer systems in protecting low- and middle-income Americans against the full effects of a depressed economy. As a result of these programs, the spendable incomes of poor and middle class families have been better insulated against recession-driven losses than the incomes of Americans in the top 1%. As the CBO statistics demonstrate, incomes in the middle and at the bottom of the distribution have fared better since 2000 than incomes at the very top." [17] Without considering these significant factors, any analysis or discussion of a widening income gap would be misleading and very likely overstated.
Most income inequality proponents make a division between the top 1 percent of Americans and the remaining 99 percent in their income inequality analyses. However, this assertion masks a very important and contrary fact … a 2014 report by University of California, Berkeley economist Emmanuel Saez has shown that the relative net wealth of the people between the top 1.0 percentile and .5 percentile has actually dropped between 1960 and 2012 ... and their income share is nearly flat. [18] [19] [20] -- Mark Miller ( talk) 22:12, 13 September 2014 (UTC)
References
The two images are said to be public Domain as a work of the US Government...however there is no link or other information to verify this. This most be rectified or the images will be deleted.-- Mark Miller ( talk) 22:29, 13 September 2014 (UTC)
Source #1 appears to be a blog-Thomas Piketty Is Wrong: America Will Never Look Like a Jane Austen Novel, New Republic.-- Mark Miller ( talk) 22:32, 13 September 2014 (UTC)
Source #3 is an opinion piece-Yet Another Reason Why Thomas Piketty' Is Wrong, Forbes and cannot be used to source facts.-- Mark Miller ( talk) 22:36, 13 September 2014 (UTC)
Source# 5- The Hidden Inequality In Socialism, The Independent Review seems to be selling subscriptions and therefore is not the best RS. Is there a copy of this in a different form?-- Mark Miller ( talk) 22:40, 13 September 2014 (UTC)
Source #6- Federal Government Is A Huge Driver Of Income Inequality, Independent Journal Review is simply not there.-- Mark Miller ( talk) 22:45, 13 September 2014 (UTC)
Source # 10 - The Myth of Income Inequality, Scientific American is a blog.-- Mark Miller ( talk) 22:50, 13 September 2014 (UTC)
Discussion ...
Source #1: No need for source #1. The statement is addressed within the paragraph, and footnoted multiple times.
Source #3: Opinion piece referenced research by Stanford and University of Chicago professors that can now be directly attributed ... "It’s the Market: The Broad-Based Rise in the Return to Top Talent". Steven N. Kaplan and Joshua Rauh. University of Chicago/Stanford University. 2013. Here is a direct link to their research work ... http://faculty.chicagobooth.edu/steven.kaplan/research/krtop.pdf
Source #5: Alternative footnotes for "The Hidden Inequality In Socialism" are available ... Here are two direct sources for the footnote material ... http://econpapers.repec.org/paper/wpawuwpdc/0411012.htm http://heartland.org/policy-documents/hidden-inequality-socialism
Source #6: Footnote material was removed by the source. However, the original source of the information was located. "The Unequal State of America: Redistributing Up". Reuters, Deborah Nelson and Himanshu Ojha, Washington D.C., December 18, 2012. And direct link to the article ... http://www.reuters.com/subjects/income-inequality/washington
Source #10: Blog footnoted a research work that can be directly attributed ... National Tax Journal, December 2013, 66 (4), 893–912, "New Perspectives On Income Mobility And Inequality" Gerald Auten, Geoffrey Gee, and Nicholas Turner. Office of Tax Analysis, U.S. Treasury Department, Washington, DC, USA. And a link ... https://www.law.upenn.edu/live/files/2934-autengeeturner-perspectives-on-mobility-inequality.
After reviewing the page for Income Inequality in the United States, we found a couple of errors that could use some editing. For starters, we felt the lead in page was a little overwhelming. It may be too long for a Wikipedia lead in section. It contains a paragraph of statistics that are, while interesting, perhaps unnecessary for the lead in. We feel they may be better used in later sections regarding the demographics of income inequality.
We also felt the general organization of the page could use some editing, especially in Causes and Effects. The font size of many of the headings need some work. It's currently unclear which headings suggest a new section and which are subsections. This made it difficult to follow what each heading, and therefore section, would be explaining. This is a minor change but we feel it will pull the entire article together.
Lastly, there are a few, but serious, claims made in the causes section that are not backed by a citation. An example we found was in the Race and Gender section of Causes. The statement reads, "- Among women, part of the wage gap is due to employment choices and preferences. Women are more likely to consider factors other than salary when looking for employment. On average, women are less willing to travel or relocate, take more hours off and work fewer hours, and choose college majors that lead to lower paying jobs."
We believe this is a serious statement to make but it was not followed with an immediate citation. There are several other facts in this section that make similar claims which could be taken as offensive by many. Therefore, we feel it's especially pertinent to have a citation for these claims to avoid the page appearing to have a bias. — Preceding unsigned comment added by 134.82.163.83 ( talk) 20:13, 16 September 2014 (UTC)
i suggest we cut this trivia from the first sentence. if not, would someone explain what value the passage contributes to the lede? Darkstar1st ( talk) 06:00, 17 September 2014 (UTC)
I find it unhelpful, as well as inaccurate and unencyclopedic, to attribute legislation to a person (Bush, Clinton, Obama). It's even inaccurate to say "the Obama Administration" since refers to the executive only. I think it would be more accurate here to say, the government did this, the government did that, rather than to attribute a particular person who may well have signed the piece of legislation. Consider how it would look if the incumbent had vetoed it and Congress overrode it! Either way, it's still "the government." Student7 ( talk) 19:44, 23 September 2014 (UTC)
Agree. Purpose of the article should be to inform rather than persuade. As it stands now, the article is a political pre-text and rationale for justifying certain socio-political actions. For example, "Political Parties and Presidents' section should be struck from the article. It serves no purpose other than POV. "Republican-World" / "Democrat-World" descriptors are also unencyclopedic and biased. Tolinjr ( talk) 19:17, 24 September 2014 (UTC)
User:C.J. Griffin wishes to strike the following section because it does not fit the narrative of the article: It is a misstatement of fact to assert that all of the Top 1 Percent of Americans have all made relative wealth gains in recent years, however. Emmanuel Saez and Gabriel Zucman of the University of California, Berkeley published research in 2014, "The Distribution of US Wealth, Capital Income and Returns since 1913," asserting that since 1960, relative wealth growth has only occurred in within the Top .1 Percent of Americans. Furthermore, their analysis also shows that since 1960, those between the Top 1 Percent and Top .5 Percent have actually lost a significant share of wealth. To be more precise, more than half of the "Top 1 Percent" have lost wealth over the past fifty years.(ref> The Distribution of US Wealth, Capital Income and Returns since 1913, Emmanuel Saez, Gabriel Zucman, March 2014</ref>
C.J. Griffin would prefer that the article be maintained as is because the political narrative heretofore as been that the Top 1 Percent is often viewed as a monolithic group, all of whom have benefitted at the expense of the lower quartiles. The facts, provided by his own often-named source, economist Emmanuel Saez, prove that this is NOT FACTUALLY TRUE. Throughout the article, the Top 1 Percent is mentioned at least two dozen times, with many supporting charts, etc. But the fact is that more than half of the Top 1 Percent (those between the top 1 percent and .5 percent) have NOT GAINED IN WEALTH IN THE PAST 50 YEARS (BETWEEN 1960 and 2012). In fact, they, like the other quartiles below them ... have LOST WEALTH. This factual reality, conclusively confirmed by Saez in 2014, is that only the Top .1 Percent has significantly gained in income and wealth. This is an essential point of difference, because it drives home the fact that income and wealth compression is far worse, and more specific, to corporate and political elites (those with incomes over $2,000,000 per year).
C.J. Griffin would prefer to maintain an article that is both factually inaccurate and knowingly misleading, for the sake of maintaining a particular political narrative. I disagree. For this reason, I have replaced the text in its original location. I am open to any input that would increase the accuracy of the facts as presented in the article. However, I believe that this is such a significantly important correction of fact, especially considering how many times Top 1 Percent is flippantly used throughout the article (three times in the article's opening paragraph and 14 more times in the 'History' section alone), that it must be prominently and clearly stated, as early in the article as possible. Tolinjr ( talk) 13:01, 11 October 2014
POV pushing goes both ways. If we remove all wealth references, then we must also remove all references to 'Gilded Age', 'Rockefellers', 'patrimonial-capitalism' etc., as they are primarily directed at the wealthy, not necessarily those with high incomes. Economic theory is not an absolute. Nobody has absolute knowledge in this realm, not Piketty, not Krugman ... nobody. Therefore, it is subject to differing analyses and perspectives as to cause. If Piketty, or anyone else, makes a claim that uses questionable (or selective) data or has been challenged by someone of equal caliber, then I see no problem with including it. it is not a personal attack, it is a legitimate challenge of economic theory (or in this case, a correction of statistical fact) by highly respected peers, who happened to prove (in this particular case) that his assertion is wrong. The bottom line is, corporatism is just as much a legitimate theory for income inequality as corporatocracy ... and I am sure there are others too. One thing to which I am non-negociable ... 'Top 1 Percent' is a political buzzword (thus POV), it is also factually incorrect and misleading for reasons already discussed. Based on your position, it would be perfectly okay to say the top 50 percent made greater gains than the bottom fifty percent. It is true ... but completely misleading. If half of the 'Top 1 Percent' have also lost ground financially, and you do not recognize that fact, then you are simply not being truthful, or purposefully deceitful ... all so you can wave that 99 percenter flag. That is POV. That is not right and it does not belong in a reference article such as this.
Hello all, I've taken a shot at editing this article based on some of the discussion items.
Farcaster ( talk) 20:46, 15 November 2014 (UTC)
![]() | This is an archive of past discussions. Do not edit the contents of this page. If you wish to start a new discussion or revive an old one, please do so on the current talk page. |
Archive 1 | Archive 2 | Archive 3 | Archive 4 |
This graph is sourced to a partisan lobbying group called Citizens for Tax Justice (ITEP is the group's "think tank" arm). It purports to show that the top 1% pay a lower total tax rate than the preceding 19%, but it has no corroboration and its internal federal component is dramatically contradicted by the federal effective rates given by the Tax Policy Center and Congressional Budget Office.
That's a huge difference that persists over time, and isn't a one year fluke. Here's a CBO breakdown over time that consistently shows the top 1%'s effective federal income tax rate to be around 30%. The Tax Policy Center is also a liberal leaning group, a joint creation of the Urban Institute and Brookings Institute, but it's prominent, widely cited, and its hard incidence numbers are generally respected across political lines. The CBO is obviously also much more prominent and widely cited than the CTJ is. That the TPC and CBO independently derive figures that closely track each other time reinforces their credibility as reliable sources. The Tax Foundation, the conservative equivalent of the TPC, is a long established, respected, widely cited think tank that has directly criticized CTJ/ITEP's methodology in producing the reports used as the graph source. CTJ is the outlier here, and also happens to be less prominent and more aggressively partisan than the ideologically diverse outfits that contradict it. At the very least its results are hotly disputed, and it doesn't warrant the implied authority of a visual image here. VictorD7 ( talk) 18:31, 19 May 2014 (UTC)
I've seen economists quote the CTJ figures, so AFAIK, it is a reliable source. What this discussion is missing is that the tax laws changed in 2013. Remember the expiry of the Bush tax cuts (originally in 2010), the ' fiscal cliff' and the tax compromise hammered out in late-2012? That compromise raised taxes on the high end. (See here for pretty chart.) I'm guessing that the discrepancy between the sources is largely because one set is looking at current law (after fiscal cliff), and another set is looking at tax incidence during the Bush tax cut years. LK ( talk) 09:54, 20 May 2014 (UTC)
Despite some different reasoning, there seems to be strong support for removing the CTJ chart, so I'll go ahead and do so. VictorD7 ( talk) 08:32, 21 May 2014 (UTC)
For editors who are assuming that income inequality is a "problem," the specifics of why it is a problem needs to be laid out a bit better. This might include a sentence or two from the linked article income inequality. It could be that simple.
Quotes could (therefore) be improved by including people who give reasons for their statements and don't just assume a given outcome is obvious for obvious reasons. On a different topic, for example, "I think the speed limit on state highways should be increased/decreased because tourists are avoiding our state because the speeds they travel are too slow/there are too many fatal accidents attributed to high speeds." Just opining that speed levels should be increased or decreased seems puerile and ineffective IMO. Which is why we should probably not quote politicians! They try to be deliberately vague for credible deniability reasons. Student7 ( talk) 14:29, 27 May 2014 (UTC)
User:Arthur Rubin deleted the addition of Wage theft to "See also", remarking, "Relationship? I see none". The second sentence of that article says, "Wage theft, particularly from low wage legal or illegal immigrant workers, is common in the United States." It seems obvious to me that reducing the actual wages of people already paid very little and transferring that money to those more highly paid increases income inequality. This suggests to me that "wage theft" is appropriate to add to "See also", and I don't understand why User:Arthur Rubin deleted it. Either User:Arthur Rubin or I is missing something -- and probably both. Could someone else please help with this? Thanks, DavidMCEddy ( talk) 06:31, 2 September 2014 (UTC)
Target text: "Scholars and others differ as to the causes, and the significance of the trend." and "Education and increased demand for skilled labor are often cited as causes" The reference sources for the reason for income inequality points to the CIA. It is more appropriate to get more scholarly sources. http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#cite_note-CIA._.28June_14.2C_2007.29._United_States:_Economy._World_factbook.-23
— Preceding unsigned comment added by 66.205.167.110 ( talk • contribs) 22:10, 6 September 2014 (UTC)
The following was moved to the talk page for discussion:
There are several key aspects of income inequality analyses, particularly those of economists Thomas Piketty and Paul Krugman, that have been proven to be inconsistent and/or flawed. [1] For example, one of their assertions is that wealthy Americans earn a higher rate of return on investment than lower income peers, and will ultimately create a 'patrimonial-capitalist' society controlled by only a few ultra-wealthy families, much like nineteenth-century Europe. Krugman has described it as a new "Gilded Age". "Piketty points to the Forbes 400 ranking of the wealthiest Americans from 1987 to 2013. He shows that the top 0.000001% of Americans—roughly the top 45 people on the Forbes list—earn about 6.8% on their money, while the average return on wealth is just 2.1%. Critics point out that income inequality proponents wrongly assume that this is a static list of wealthy Americans who remain rich. In reality, there has been a great deal of turnover on the Forbes 400; only 35 people from the original 1982 list remain today. Many have fallen off as a result of heavy spending, large-scale philanthropy, and bad investing. The current Forbes 400 is now primarily made up of newly wealthy business owners, not heirs and heiresses. The University of Chicago’s Steve Kaplan and Stanford University’s Joshua Rauh note that 69% of those on the list are first generation wealth creators. That figure has risen dramatically since 1982 when it stood at 40%. So it’s likely that rising income inequality is not the product of inheritance, as Piketty, Krugman, and others assume, but rather the result of entrepreneurs like Bill Gates and Jeff Bezos being paid for their ingenuity." [2] Thus, capitalism does not contribute to an inherited-wealth stagnation and consolidation, but instead promotes the opposite ... a vigorous, ongoing turnover and creation of new wealth. [3] [4]
One of the primary recommendations made by income inequality proponents is central planned/ state interventionism. Abundant research, as well as empirical evidence, has demonstrated that income inequality also exists in statist (socialist) countries. However, the nature of income inequality in statist countries is driven by political, rather than economic factors ... as articulated in a recent analysis entitled "The Hidden Inequality In Socialism" (David Henderson-Naval Postgraduate School, Hoover Institution, Stanford University and Tamas Rozsas-Ministry of Economy and Transport, Department of Information Technologies and Statistics, Budapest, Hungary); "The causes of income inequality are more important than the degree of income inequality itself. In a socialist economy, income inequality hinges for the most part on differences in political power, political connections, and loyalty to the government. To better one’s economic condition in a socialist economy, therefore, one must become politically connected or, at least, must display loyalty to the government. Also, because people have little incentive to produce valuable goods in a socialist economy, most people claw for improved position in a zero-sum game in which one person’s gain is another’s loss. In a market economy, by contrast, income inequality reflects differences in productive ability for the most part. The way to better oneself economically in a market economy, therefore, is to become more productive—that is, to contribute more to the wealth of one’s fellow human beings in return for pecuniary rewards. Markets are positive-sum games. Bill Gates and Michael Dell are extraordinarily wealthy not because of their political connections but because they have produced goods that consumers value. Inequalities in a market economy, therefore, serve a useful function, giving people incentives to work harder, study more, and take sensible risks, thereby contributing to other people’s well-being. Further research should focus on the causes of inequality instead of its degree, with special attention on corruption and income redistribution through government transfers." [5] [6]
In 2012, National Affairs journal published the following, "The implicit assumption behind the case for the injustice of income inequality is that the wealthy are the reason why the poor are poor, or at least why they cannot escape their poverty. If this claim were true, it would be much easier to connect income inequality with injustice, and so to justify a redistributionist agenda. Yet this assumption rests on another economic premise that itself is highly dubious: the idea that income is a zero-sum game. Moral critics of inequality often portray total national income as if it were a pie: There is only a fixed amount to go around, they suggest, so if someone's slice gets bigger, another person's must get smaller. Much of the moral debate about income inequality seems to rest on this zero-sum theory. As Kevin Drum of Mother Jones magazine put it last year, "This income shift is real. We can debate its effects all day long, but it's real. The super rich have a much bigger piece of the pie than they used to, and that means a smaller piece of the pie for all the rest of us." [7] In a functioning market economy, however, the total amount of income is decidedly not static; economic exchange is not a zero-sum game." This is corroborated by a Pew Charitable Trust report released in 2009 entitled "Ups and Downs: Does the American Economy Still Promote Upward Mobility?" and by a 2007 report by the Congressional Budget Office, finding that both middle and lower income Americans experienced absolute and inflation-adjusted economic gains between 1979 and 2005, thus dispelling the notion that increased earnings of high-income workers generally cause some people to be poor or prevent them from improving their economic status. [8] [9] [10]
The Census Bureau ranks all households by household income and then divides this distribution of households into quintiles. The highest-ranked household in each quintile provides the upper income limit for each quintile. Comparing changes in these upper income limits over time for different quintiles reveals that the income of wealthier households has been growing faster than the income of poorer households, thus giving the impression of an increasing “income gap” or “shrinking middle class.” One big problem with inferring income inequality from the census income statistics is that the census statistics provide only a snapshot of income distribution in the U.S., at a single point in time. The statistics do not reflect the reality that income for many households changes over time—i.e., incomes are mobile. For most people, income increases over time as they move from their first, low-paying job in high school to a better-paying job later in their lives. Also, some people lose income over time because of business-cycle contractions, demotions, career changes, retirement, etc. The implication of changing individual incomes is that individual households do not remain in the same income quintiles over time. Thus, comparing different income quintiles over time is like comparing apples to oranges, because it means comparing incomes of different people at different stages in their earnings profile. [11]
In addition, there have been a number of other challenges to the integrity and interpretation of the data presented in many income inequality analyses by economists and scholars. [12] [13] [14] [15] [16]
The Brookings Institution's Gary Burtless published findings (using Congressional Budget Office data) in a 2014 report that contradicts accepted theories of income inequality, "Some crucial findings of this new study may come as a surprise, especially to people who believe incomes of the poor and middle class have stagnated since the turn of the century while incomes at the top have soared. The CBO’s latest numbers show the opposite is true. Since 2000 pre-tax and after-tax incomes have improved among Americans in the bottom 90% of the income distribution. Among Americans in the top 1% of the distribution, real incomes sank. (Chart 1)" These results reflected recent economic conditions, when the economy suffers the wealthiest absorb the greatest loss of income. However, when the economy is strong, they stand to gain the most. Between 2000 and 2010, the wealthiest took losses while other quartiles did not.
One reason that many observers fail to recognize these lower- and middle-income gains is that the nation’s most widely cited income statistics do not capture key information. "A commonly used indicator of middle class income is the Census Bureau’s estimate of median household money income. The main problem with this income measure is that it only reflects households’ before-tax cash incomes. It fails to account for changing tax burdens and the impact of income sources that do not take the form of cash. This means, for example, that tax cuts in 2001-2003 and 2008-2012 are missed in the Census statistics. Even worse, the Census Bureau measure ignores income received as in-kind benefits and health insurance coverage from employers and the government. By ignoring such benefits as well as sizeable tax cuts in the recession, the Census Bureau’s money income measure seriously overstated the income losses that middle-income families suffered in the recession. New Congressional Budget Office income statistics are beginning to show the growing importance of these items. In 1980, in-kind benefits and employer and government spending on health insurance accounted for just 6% of the after-tax incomes of households in the middle one-fifth of the distribution. By 2010 these in-kind income sources represented 17% of middle class households’ after-tax income. (Chart 4)"
"The income items missed by the Census Bureau are increasing faster than the income items included in its money income measure. What many observers miss, however, is the success of the nation’s tax and transfer systems in protecting low- and middle-income Americans against the full effects of a depressed economy. As a result of these programs, the spendable incomes of poor and middle class families have been better insulated against recession-driven losses than the incomes of Americans in the top 1%. As the CBO statistics demonstrate, incomes in the middle and at the bottom of the distribution have fared better since 2000 than incomes at the very top." [17] Without considering these significant factors, any analysis or discussion of a widening income gap would be misleading and very likely overstated.
Most income inequality proponents make a division between the top 1 percent of Americans and the remaining 99 percent in their income inequality analyses. However, this assertion masks a very important and contrary fact … a 2014 report by University of California, Berkeley economist Emmanuel Saez has shown that the relative net wealth of the people between the top 1.0 percentile and .5 percentile has actually dropped between 1960 and 2012 ... and their income share is nearly flat. [18] [19] [20] -- Mark Miller ( talk) 22:12, 13 September 2014 (UTC)
References
The two images are said to be public Domain as a work of the US Government...however there is no link or other information to verify this. This most be rectified or the images will be deleted.-- Mark Miller ( talk) 22:29, 13 September 2014 (UTC)
Source #1 appears to be a blog-Thomas Piketty Is Wrong: America Will Never Look Like a Jane Austen Novel, New Republic.-- Mark Miller ( talk) 22:32, 13 September 2014 (UTC)
Source #3 is an opinion piece-Yet Another Reason Why Thomas Piketty' Is Wrong, Forbes and cannot be used to source facts.-- Mark Miller ( talk) 22:36, 13 September 2014 (UTC)
Source# 5- The Hidden Inequality In Socialism, The Independent Review seems to be selling subscriptions and therefore is not the best RS. Is there a copy of this in a different form?-- Mark Miller ( talk) 22:40, 13 September 2014 (UTC)
Source #6- Federal Government Is A Huge Driver Of Income Inequality, Independent Journal Review is simply not there.-- Mark Miller ( talk) 22:45, 13 September 2014 (UTC)
Source # 10 - The Myth of Income Inequality, Scientific American is a blog.-- Mark Miller ( talk) 22:50, 13 September 2014 (UTC)
Discussion ...
Source #1: No need for source #1. The statement is addressed within the paragraph, and footnoted multiple times.
Source #3: Opinion piece referenced research by Stanford and University of Chicago professors that can now be directly attributed ... "It’s the Market: The Broad-Based Rise in the Return to Top Talent". Steven N. Kaplan and Joshua Rauh. University of Chicago/Stanford University. 2013. Here is a direct link to their research work ... http://faculty.chicagobooth.edu/steven.kaplan/research/krtop.pdf
Source #5: Alternative footnotes for "The Hidden Inequality In Socialism" are available ... Here are two direct sources for the footnote material ... http://econpapers.repec.org/paper/wpawuwpdc/0411012.htm http://heartland.org/policy-documents/hidden-inequality-socialism
Source #6: Footnote material was removed by the source. However, the original source of the information was located. "The Unequal State of America: Redistributing Up". Reuters, Deborah Nelson and Himanshu Ojha, Washington D.C., December 18, 2012. And direct link to the article ... http://www.reuters.com/subjects/income-inequality/washington
Source #10: Blog footnoted a research work that can be directly attributed ... National Tax Journal, December 2013, 66 (4), 893–912, "New Perspectives On Income Mobility And Inequality" Gerald Auten, Geoffrey Gee, and Nicholas Turner. Office of Tax Analysis, U.S. Treasury Department, Washington, DC, USA. And a link ... https://www.law.upenn.edu/live/files/2934-autengeeturner-perspectives-on-mobility-inequality.
After reviewing the page for Income Inequality in the United States, we found a couple of errors that could use some editing. For starters, we felt the lead in page was a little overwhelming. It may be too long for a Wikipedia lead in section. It contains a paragraph of statistics that are, while interesting, perhaps unnecessary for the lead in. We feel they may be better used in later sections regarding the demographics of income inequality.
We also felt the general organization of the page could use some editing, especially in Causes and Effects. The font size of many of the headings need some work. It's currently unclear which headings suggest a new section and which are subsections. This made it difficult to follow what each heading, and therefore section, would be explaining. This is a minor change but we feel it will pull the entire article together.
Lastly, there are a few, but serious, claims made in the causes section that are not backed by a citation. An example we found was in the Race and Gender section of Causes. The statement reads, "- Among women, part of the wage gap is due to employment choices and preferences. Women are more likely to consider factors other than salary when looking for employment. On average, women are less willing to travel or relocate, take more hours off and work fewer hours, and choose college majors that lead to lower paying jobs."
We believe this is a serious statement to make but it was not followed with an immediate citation. There are several other facts in this section that make similar claims which could be taken as offensive by many. Therefore, we feel it's especially pertinent to have a citation for these claims to avoid the page appearing to have a bias. — Preceding unsigned comment added by 134.82.163.83 ( talk) 20:13, 16 September 2014 (UTC)
i suggest we cut this trivia from the first sentence. if not, would someone explain what value the passage contributes to the lede? Darkstar1st ( talk) 06:00, 17 September 2014 (UTC)
I find it unhelpful, as well as inaccurate and unencyclopedic, to attribute legislation to a person (Bush, Clinton, Obama). It's even inaccurate to say "the Obama Administration" since refers to the executive only. I think it would be more accurate here to say, the government did this, the government did that, rather than to attribute a particular person who may well have signed the piece of legislation. Consider how it would look if the incumbent had vetoed it and Congress overrode it! Either way, it's still "the government." Student7 ( talk) 19:44, 23 September 2014 (UTC)
Agree. Purpose of the article should be to inform rather than persuade. As it stands now, the article is a political pre-text and rationale for justifying certain socio-political actions. For example, "Political Parties and Presidents' section should be struck from the article. It serves no purpose other than POV. "Republican-World" / "Democrat-World" descriptors are also unencyclopedic and biased. Tolinjr ( talk) 19:17, 24 September 2014 (UTC)
User:C.J. Griffin wishes to strike the following section because it does not fit the narrative of the article: It is a misstatement of fact to assert that all of the Top 1 Percent of Americans have all made relative wealth gains in recent years, however. Emmanuel Saez and Gabriel Zucman of the University of California, Berkeley published research in 2014, "The Distribution of US Wealth, Capital Income and Returns since 1913," asserting that since 1960, relative wealth growth has only occurred in within the Top .1 Percent of Americans. Furthermore, their analysis also shows that since 1960, those between the Top 1 Percent and Top .5 Percent have actually lost a significant share of wealth. To be more precise, more than half of the "Top 1 Percent" have lost wealth over the past fifty years.(ref> The Distribution of US Wealth, Capital Income and Returns since 1913, Emmanuel Saez, Gabriel Zucman, March 2014</ref>
C.J. Griffin would prefer that the article be maintained as is because the political narrative heretofore as been that the Top 1 Percent is often viewed as a monolithic group, all of whom have benefitted at the expense of the lower quartiles. The facts, provided by his own often-named source, economist Emmanuel Saez, prove that this is NOT FACTUALLY TRUE. Throughout the article, the Top 1 Percent is mentioned at least two dozen times, with many supporting charts, etc. But the fact is that more than half of the Top 1 Percent (those between the top 1 percent and .5 percent) have NOT GAINED IN WEALTH IN THE PAST 50 YEARS (BETWEEN 1960 and 2012). In fact, they, like the other quartiles below them ... have LOST WEALTH. This factual reality, conclusively confirmed by Saez in 2014, is that only the Top .1 Percent has significantly gained in income and wealth. This is an essential point of difference, because it drives home the fact that income and wealth compression is far worse, and more specific, to corporate and political elites (those with incomes over $2,000,000 per year).
C.J. Griffin would prefer to maintain an article that is both factually inaccurate and knowingly misleading, for the sake of maintaining a particular political narrative. I disagree. For this reason, I have replaced the text in its original location. I am open to any input that would increase the accuracy of the facts as presented in the article. However, I believe that this is such a significantly important correction of fact, especially considering how many times Top 1 Percent is flippantly used throughout the article (three times in the article's opening paragraph and 14 more times in the 'History' section alone), that it must be prominently and clearly stated, as early in the article as possible. Tolinjr ( talk) 13:01, 11 October 2014
POV pushing goes both ways. If we remove all wealth references, then we must also remove all references to 'Gilded Age', 'Rockefellers', 'patrimonial-capitalism' etc., as they are primarily directed at the wealthy, not necessarily those with high incomes. Economic theory is not an absolute. Nobody has absolute knowledge in this realm, not Piketty, not Krugman ... nobody. Therefore, it is subject to differing analyses and perspectives as to cause. If Piketty, or anyone else, makes a claim that uses questionable (or selective) data or has been challenged by someone of equal caliber, then I see no problem with including it. it is not a personal attack, it is a legitimate challenge of economic theory (or in this case, a correction of statistical fact) by highly respected peers, who happened to prove (in this particular case) that his assertion is wrong. The bottom line is, corporatism is just as much a legitimate theory for income inequality as corporatocracy ... and I am sure there are others too. One thing to which I am non-negociable ... 'Top 1 Percent' is a political buzzword (thus POV), it is also factually incorrect and misleading for reasons already discussed. Based on your position, it would be perfectly okay to say the top 50 percent made greater gains than the bottom fifty percent. It is true ... but completely misleading. If half of the 'Top 1 Percent' have also lost ground financially, and you do not recognize that fact, then you are simply not being truthful, or purposefully deceitful ... all so you can wave that 99 percenter flag. That is POV. That is not right and it does not belong in a reference article such as this.
Hello all, I've taken a shot at editing this article based on some of the discussion items.
Farcaster ( talk) 20:46, 15 November 2014 (UTC)