Cross Posted from SaxtonWatch.org
Jim Saxton, through is position on the House Joint Economic Committee, sent out a press release on Sept 12 with the screaming headline: INCOME INEQUALITY STATISTICALLY UNCHANGED SINCE 2001 and this picture into the world according to Saxton...
"Despite all the discussion about income inequality, the fact is that it hasn't changed in recent years, according to the Census Bureau measure," ranking Joint Economic Committee member Congressman Jim Saxton said today. "Congress should consider this fact before acting on the assumption that income inequality is surging.
Saxton conveniently used the Census Bureau information to justify this statement, but according to an article from the Wall Street Journal, thats not the best judge and in fact the Income-Inequality gap has risen and continues to rise...
The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.
The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.
The IRS data, based on a large sample of tax returns, are for "adjusted gross income," which is income after some deductions, such as for alimony and contributions to individual retirement accounts. While dated, many scholars prefer it to timelier data from other agencies because it provides details of the very richest -- for example, the top 0.1% and the top 1%, not just the top 10% -- and includes capital gains, an important, though volatile, source of income for the affluent.
The IRS data go back only to 1986, but academic research suggests the rich last had this high a share of total income in the 1920s.
The end of the article has this sobering stat...
The data highlight the political challenge facing Mr. Bush and the Republican contenders for president. They have sought to play up the strength of the economy since 2003 and low unemployment, and the role of Mr. Bush's tax cuts in both. But many Americans think the economy is in or near a recession. The IRS data show that the median tax filer's income -- half earn less than the median, half earn more -- fell 2% between 2000 and 2005 when adjusted for inflation, to $30,881. At the same time, the income level for the tax filer just inside the top 1% grew 3%, to $364,657.
Preliminary math shows the top at +3, the median at -2. Thats a change of 5 with the median falling further behind the top. That seems to be a widening gap. This is just another example of how Jim Saxton is out of touch. In his world, down is up and left is really right. It is so past time for a change.