If we don't continue giving the very wealthiest a giant tax break, how will we survive?
The top one percent of households received 21.8 percent of all pre-tax income in 2005, more than double what that figure was in the 1970s. (The top one percent's share of total income bottomed out at 8.9 percent in 1976.) This is the greatest concentration of income since 1928, when 23.9 percent of all income went to the richest one percent. (Piketty and Saez)
The above figures include capital gains, which are strongly affected by the ups and downs of the financial markets. Excluding capital gains, the richest one percent claimed 17.4 percent of all pre-tax income in 2005, more than double what that figure was in the 1970s. (It bottomed out at 7.8 percent in 1973.) This is the greatest concentration of income since 1936, when the richest one percent received 17.6 percent of total income. (Piketty and Saez)
Between 1979 and 2005, the top five percent of American families saw their real incomes increase 81 percent. Over the same period, the lowest-income fifth saw their real incomes decline 1 percent. (Census Bureau)
In 1979, the average income of the top 5 percent of families was 11.4 times as large as the average income of the bottom 20 percent. In 2005, the ratio was 20.9 times. (EPI, State of Working America 2006-07, Figure 1J)
All of the income gains in 2005 went to the top 10 percent of households, while the bottom 90 percent of households saw income declines. (EPI Snapshot, March 28, 2007)
Bear in mind that the data in the charts below only reflect data through 3 or 4 years ago. With Bush giving them everything they ask for, the top 1% has continued widening the gap since then.
The gulf between rich and poor is approaching it's historic high not seen since 1928, just prior to the great depression.
The rich are getting richer, and the rate at which they're leaving the other 99% of us behind is accelerating.
This tells the story. Top 1% of the wealthy control 34.3% of the wealth, the next 9% control an additional 36.9, and the bottom 90% possess just 28.7% of the country's wealth. And these are figures from 4 years ago. The proportions are likely even more skewed today.
This shows the rate at which income has grown for the top 5% wealthiest people in the U.S., and the rest of Americans divided into 5 equal groups. While the lowest 20%'s income has actually fallen since 1987, the richest 5% has grown a full 81% and the rate is accelerating.
How has your after-tax income been faring? If you were in the top 1%, you've been doing pretty well. Your after tax income rose 176% in just the five years ending in 2004.
And of course, we can't forget those poor, put-upon CEOs, the ones who, if you listen to Republicans, are practically on street corners selling pencils, they're taxed so heavily. Here's how they did compared to the average wage earner.
Despite the incessant yammering of right wing ideologues and propagandists trying to convince us that the tax burden is simply crushing us, the U.S. already enjoys one of the very lowest tax rates as a percentage of GDP in the world.
Beyond that, those wealthy enough to fall within the top tax bracket in the U.S. have been paying 35%, the lowest rate in 14 years.
As this chart shows, the only time the top tax rate has been lower is prior to the great depression. In order to pull the country out of the economic crash that corrolated with top rates of only 24%, the rate was raised nearly 40% to 63%, and rose steeply after that.
Between 1932 and 1986, the top rate was never lower than 50%, much less during a time of war. As a matter of fact, during World War II, the top tax rate paid by the very wealthy reached a whopping 94%!!! How did we survive?
Under the anti-tax zealots arguments, that should have utterly destroyed our entire economy. Yet oddly, the post war years were one of the biggest booms in U.S. history.
They often point out that JFK cut tax rates, but during his administration, the top rate simply went back down to 91% from 92%. Not exactly the same as Bush's reckless slashing.
The only period in modern history that the top tax rate has been lower than it stands today is the two years from 1988 through 1990, when it stood at 33%, and for one year, 1991, when it was 31%, a rate, by the way, that was unsustainable and forced Bush I to raise rates again.
See the chart titled, "Partial History of U.S. Federal Income Tax Rates Since 1913"