That Sound You're Hearing is the Rich Getting Richer
Some cheery economic news from Steven Rattner, a longtime Wall Street executive, in a New York Times Op-Ed. His data comes from French economists Thomas Piketty and Emmanuel Saez, who worked from U.S. tax returns:
In 2010, as the nation continued to recover from the recession, a dizzying 93 percent of the additional income created in the country — $288 billion — went to the top 1 percent of taxpayers, those with at least $352,000 in income. That delivered an average single-year pay increase of 11.6 percent to each of these households...
The bottom 99 percent received a microscopic $80 increase in pay per person in 2010, after adjusting for inflation...
Government has ... played a role, particularly the George W. Bush tax cuts, which, among other things, gave the wealthy a 15 percent tax on capital gains and dividends. That’s the provision that caused Warren E. Buffett’s secretary to have a higher tax rate than he does.
As a result, the top 1 percent has done progressively better in each economic recovery of the past two decades. In the Clinton era expansion, 45 percent of the total income gains went to the top 1 percent; in the Bush recovery, the figure was 65 percent; now it is 93 percent...
The only way to redress the income imbalance is by implementing policies that are oriented toward reversing the forces that caused it. That means letting the Bush tax cuts expire for the wealthy and adding money to some of the programs that House Republicans seek to cut. Allowing this disparity to continue is both bad economic policy and bad social policy. We owe those at the bottom a fairer shot at moving up.
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