Income Inequality and how the middle class has been screwed
Most of us believe that our citizens are entitled to a living wage. In my mind that should include adequate nutrition, acceptable housing and affordable healthcare at a bear minimum. Overall the US is the wealthiest country in the world, by far, and yet fully 1/3 of our families could not afford the average cost of healthcare if they had to pay for it. The average cost per person (regardless of age) is approaching $11,000 per year. A young family, with both husband and wife working at minimum wage would not only not have enough to pay for healthcare, but they would have nothing for food, housing, utilities, etc.
It was recently reported the top 400 wealthiest persons have a worth in excess of fully ½ of the population at the bottom end. There are top executives in companies that are earning 500 times the average wage of rest of their workers below the executive level.
The United States has the 4th worst income inequality among all the industrialized nations. The only countries that are worse are Turkey, Mexico & Chile.
It’s hard to imagine the United States being so high on this list, but truthfully, the US hasn’t seen such large income disparity since 1928. And if you thought some of the other countries had it bad in regards to numbers, these numbers will no doubt serve to shock: From 2009 to 2012, the top 1% in the U.S. claimed 95% of gains from the economic recovery. And the rest of country, the other 99%? They only saw income growth of 0.4% while their richer counterparts saw their incomes rise by over 30%. While the economy is superficially showing recovery from the Global Financial Crisis, the reality is that the lower classes are not recovering nearly as fast as that top 1%.
The following chart is another view of the inequality. It is from 2003 and the current numbers are much worse. The adjusted average adjusted gross income for ½ of the tax payers is less than 14%. Obviously, the recent tax cut will only serve to increase the disparity as almost 2/3rd of the proceeds went to high income folks.. How can anyone think this is fair?
More on this topic in next week’s post
|Income Group||Number of Returns||AGI ($ millions)||Income taxes paid ($ millions)||Group’s share of total AGI (%)||Group’s share of income taxes (%)||Average tax rate (%)||avg income|
|All taxpayers||128,609,786||6,287,586||747,939||100%||100%||11.90%||$ 48,889|
|Top 5%||6,430,489||1,960,676||406,597||31.18%||54.36%||20.74%||$ 304,903|
|Top 10%||12,860,979||2,663,470||492,452||42.36%||65.84%||18.49%||$ 207,097|
|Top 25%||32,152,447||4,078,277||627,380||64.86%||83.88%||15.38%||$ 126,842|
|Top 50%||64,304,893||5,407,851||722,027||86.01%||96.54%||13.35%||$ 84,097|
|Bottom 50%||64,304,893||879,735||25,912||13.99%||3.46%||2.95%||$ 13,681|
More on this topic next week