The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90%

[Loren Pechtel]

Why do I think the income numbers weren't accurate during that period?

does it matter?
the specific numbers don't really matter when you have the existence of mansions and the existence of tenement housing in the same society.

Even worse, homeless people living on the streets of the richest nations on earth.

The homeless problem isn't one that can be solved by throwing money at it. Most of the homeless are that way because of substance abuse or mental illness, both of which can only be dealt with if the person wants to deal with it. Trying to make life easier for them actually makes the problem worse because it makes it easier to avoid treatment.

 

[Loren Pechtel]

This is assuming we have accurate income numbers from back then.

Strangely enough there was a period in which the tax code was brutal to high personal income--during which personal income was a lot lower than either before or after. This was a period where there were a lot of legal tax avoidance schemes and little ability to detect tax evasion by the rich.

Why do I think the income numbers weren't accurate during that period?

Do you think that there is less tax avoidance now than there was in 1975?

One simple example: Look at the crash in commercial real estate prices in the 80s. That came about because it had been driven up way above it's true market value because of it's use in tax avoidance.

Certainly, income tax avoidance due to the capital gains scam is higher today than in 1975. Tieing CEO bonuses to the corporation's stock price and thereby encouraging them to convert corporate income into higher stock prices by buying their own stock was unheard of in 1975.

While it is bad for the economy it has nothing to do with tax avoidance.

Do you agree that there is a much worse income and wealth inequality today than there was in 1975?

I'm saying we don't have the data one way or the other, and the problem is far more complex than simply tax policy anyway.

You would expect inequality to go up with the computer revolution. It made highly skilled people far more productive because they waste far less time on low-skill parts of their job. Taxing that away would be very unfair.

Also, even at the bottom the standard of living has risen, just not as fast as it did at the top.

 

[Testy Calibrate]

Even worse, homeless people living on the streets of the richest nations on earth.

The homeless problem isn't one that can be solved by throwing money at it. Most of the homeless are that way because of substance abuse or mental illness, both of which can only be dealt with if the person wants to deal with it. Trying to make life easier for them actually makes the problem worse because it makes it easier to avoid treatment.

It can be solved by providing homes. Money could do that.

 

[Loren Pechtel]

Regardless what the exact numbers are, what's necessary is:

Increase property taxes, and make property taxes graduated.

Assess a tax on Wall Street (tax on all stock sales) (the one good Bernie Sanders idea)

Maybe increase the top income tax rate a little, but also eliminate or reduce the rates on the middle- and lower-level brackets. Eliminate the need for anyone in the bottom half to submit income tax forms.

I could not agree more with all of this.

But on the income tax part, the IRS will always prefer picking on the middle and lower level brackets because there are so many more of them and they are far worse represented to defend themselves.

There's another factor here that's far more important: It's hard picking on the rich. At middle class levels there are few situations where one individual is on both sides of a transaction. Furthermore, most of the transactions are straightforward and generate standardized tax reporting documents. This lets the computer cross-check most of what is on the return, there's very little room to hide things. If the IRS comes asking you're almost certainly caught (although "caught" very well might make a slap on the wrist with a wet noodle seem harsh. They've "caught" me for sins like transposing two digits, pay the different tax and interest on it, that's it. The biggest "penalty" was the time figuring out exactly what I had done wrong and amending the return. I've even had them complain (incorrectly I think) about an amount so trivial that they assessed the extra tax and in the same letter said it was so small that they were simply writing it off, don't pay the bill.) If you're rich, however, investment deals become much more complex, often they don't fit into the standard forms in ways that lets the IRS computers match everything up, and it's much more likely for one individual to be on both sides of the transaction (either between one's business and oneself or between two businesses one owns) which opens up an awful lot more wiggle room. (For example, note the allegations of His Flatulence using wildly different valuations on things.)

 

[Loren Pechtel]

Separating Fact from Fiction

Myth: The cause of homelessness is drug and alcohol abuse.

False. Only 20% of people report drugs and alcohol as the cause of their homelessness. Drug
and alcohol abuse are often the result of homelessness, not the cause.

Myth: Homelessness is a choice. Most homeless people choose to live on the streets.

False. According to the Homeless Census in Santa Clara County, 93% of homeless respondents
want affordable housing.

The biggest barrier to housing is affordable rent.

• 68% couldn’t afford rent
• 50% had no work or income
• 38% reported no available housing
• 20% had criminal records that prevented their access to housing

https://www.currytbcenter.ucsf.edu/sites/default/files/product_tools/homelessnessandtbtoolkit/docs/background/Factsheet/Debunking%20the%20Myths%20of%20Homelessness.pdf

Note that your data is for one of the most expensive areas in the US, there are a lot more economic homeless there than in most places.

Beyond that

Other reasons include:
•There are not enough beds
•There are more men’s shelters than women’s
•They don’t always know where to find the closest shelter
•They have to think about whether they have the energy or the means to make the trek to the closest shelter. Choosing between spending money on bus fare versus eating is a hard, daily choice.

I don't know the data for the bay area, but locally on the worst nights the news often makes an issue of a lack of shelter space--but it's always down to <x> beds, never down to zero beds. They never fill up.

Also, note that point #2 is part of #1--they're trying to come up with reasons.

As for the percent that are mentally ill:

https://www.bbrfoundation.org/blog/homelessness-and-mental-illness-challenge-our-society

Try 45%.

 

[DBT]

Even worse, homeless people living on the streets of the richest nations on earth.

The homeless problem isn't one that can be solved by throwing money at it. Most of the homeless are that way because of substance abuse or mental illness, both of which can only be dealt with if the person wants to deal with it. Trying to make life easier for them actually makes the problem worse because it makes it easier to avoid treatment.

People turn to drugs for a reason...a sense of hopelessness, no purpose, poor prospects, etc. Not everyone can become Doctors or Lawyers. Somebody has to do menial work, being so poorly paid adds to it's soul destroying nature, being at the bottom of the heap, not only in status but substandard pay.

 

[barbos]

Even worse, homeless people living on the streets of the richest nations on earth.

The homeless problem isn't one that can be solved by throwing money at it. Most of the homeless are that way because of substance abuse or mental illness, both of which can only be dealt with if the person wants to deal with it. Trying to make life easier for them actually makes the problem worse because it makes it easier to avoid treatment.

People turn to drugs for a reason...a sense of hopelessness, no purpose, poor prospects, etc. Not everyone can become Doctors or Lawyers. Somebody has to do menial work, being so poorly paid adds to it's soul destroying nature, being at the bottom of the heap, not only in status but substandard pay.

it's clearly a medical and to a lesser degree societal problem. Certain percentage of people are born to be unhappy/dumb, drug, food and alcohol addicts. Giving them money will do nothing to solve the problem.

Anyway, un-kulaking top 1% will do you absolutely nothing positive because wealth of top 1% concentrated in stock-market, it's not associated with actual consumption. You would have to go after top 10% to make any difference and there is no guarantee that difference will be positive.

 

[DBT]

People turn to drugs for a reason...a sense of hopelessness, no purpose, poor prospects, etc. Not everyone can become Doctors or Lawyers. Somebody has to do menial work, being so poorly paid adds to it's soul destroying nature, being at the bottom of the heap, not only in status but substandard pay.

it's clearly a medical and to a lesser degree societal problem. Certain percentage of people are born to be unhappy/dumb, drug, food and alcohol addicts. Giving them money will do nothing to solve the problem.

Anyway, un-kulaking top 1% will do you absolutely nothing positive because wealth of top 1% concentrated in stock-market, it's not associated with actual consumption. You would have to go after top 10% to make any difference and there is no guarantee that difference will be positive.

I didn't suggest giving them money. Opportunity and decent pay would be a good start.

 

[barbos]

\
I didn't suggest giving them money. Opportunity and decent pay would be a good start.

If we are talking about bottom 5% which includes these drunks sleeping on the street there is no difference between opportunity and simply giving them money. For all intents and purposes they are less than useless as any kind of workers. You have to actively spend a lot of money and time to care for them, cause they are mentally less than capable to care for themselves.
Of course there are some rare exclusions to all that.

 

[DBT]

\
I didn't suggest giving them money. Opportunity and decent pay would be a good start.

If we are talking about bottom 5% which includes these drunks sleeping on the street there is no difference between opportunity and simply giving them money. For all intents and purposes they are less than useless as any kind of workers. You have to actively spend a lot of money and time to care for them, cause they are mentally less than capable to care for themselves.
Of course there are some rare exclusions to all that.

The issue is broader than that. As shown by the stats, there has been a steady erosion of income that has extended well into the middle class during last four decades . The very rich have become richer at the expense of everyone else below. The system favours the rich.

 

[bleubird]

https://www.juneaucf.org/index.php/special-projects-juneau-housing-first/
LP,this works.Every city that has done this has SAVED money.

 

[prideandfall]

The homeless problem isn't one that can be solved by throwing money at it.

how can you possibly assert that, given that it's a problem that's never had money thrown at it so we have no idea if that would solve it or not.
and in fact, in the rare instances in the modern world where money WAS thrown at it, it DID solve the problem.

Most of the homeless are that way because of substance abuse or mental illness, both of which can only be dealt with if the person wants to deal with it.

this is blatantly, verifiably, demonstrably false.
that is the lie that conservative forces perpetuate in order to blame the homeless for being homeless but it is statistically provable that it is untrue.
look at literally any and every study or body of research ever conducted about homelessness, the results are consistent and staggering: the myth of the deranged druggie hobo is pop culture taking the 1 in 1000 worst case scenario and everyone thinking that's the norm, and it simply isn't.

Trying to make life easier for them actually makes the problem worse because it makes it easier to avoid treatment.

oh for fuck's literal sake.

pro tip: you'd have to actually try to make their lives easier before you could assess the outcome of doing so.

 

[Loren Pechtel]

Even worse, homeless people living on the streets of the richest nations on earth.

The homeless problem isn't one that can be solved by throwing money at it. Most of the homeless are that way because of substance abuse or mental illness, both of which can only be dealt with if the person wants to deal with it. Trying to make life easier for them actually makes the problem worse because it makes it easier to avoid treatment.

People turn to drugs for a reason...a sense of hopelessness, no purpose, poor prospects, etc. Not everyone can become Doctors or Lawyers. Somebody has to do menial work, being so poorly paid adds to it's soul destroying nature, being at the bottom of the heap, not only in status but substandard pay.

Substance abuse is very often related to problems with life--not poverty.

 

[Loren Pechtel]

https://www.juneaucf.org/index.php/special-projects-juneau-housing-first/
LP,this works.Every city that has done this has SAVED money.

This can work for substance abusers but anything not fixed in place likely gets sold to support their habit. Try it on mental illness and you tend to get wrecked property.

 

[Loren Pechtel]

how can you possibly assert that, given that it's a problem that's never had money thrown at it so we have no idea if that would solve it or not.
and in fact, in the rare instances in the modern world where money WAS thrown at it, it DID solve the problem.


this is blatantly, verifiably, demonstrably false.
that is the lie that conservative forces perpetuate in order to blame the homeless for being homeless but it is statistically provable that it is untrue.
look at literally any and every study or body of research ever conducted about homelessness, the results are consistent and staggering: the myth of the deranged druggie hobo is pop culture taking the 1 in 1000 worst case scenario and everyone thinking that's the norm, and it simply isn't.

Trying to make life easier for them actually makes the problem worse because it makes it easier to avoid treatment.

oh for fuck's literal sake.

pro tip: you'd have to actually try to make their lives easier before you could assess the outcome of doing so.

Continuing to assert the leftist fantasy doesn't make it so.

Substance abuse and mental illness treatment is hard. People rarely get help unless continuing with the current situation is worse. Try to help the current situation thus perpetuates the underlying problem. There's a reason for tough love approaches to addiction!

 

[DBT]

People turn to drugs for a reason...a sense of hopelessness, no purpose, poor prospects, etc. Not everyone can become Doctors or Lawyers. Somebody has to do menial work, being so poorly paid adds to it's soul destroying nature, being at the bottom of the heap, not only in status but substandard pay.

Substance abuse is very often related to problems with life--not poverty.

Economic pressure, opportunities, prospects, job security, income, status, providing for a family, house, home, etc....is a very large part of life.

 

[prideandfall]

Continuing to assert the leftist fantasy doesn't make it so.

and what fantasy would that be, exactly?
1. most homeless aren't mentally ill or drugs addicts - scientifically proven statistical fact.
2. in the few instances in the modern world where money was thrown at the problem, the problem went away - observable reality.

Substance abuse and mental illness treatment is hard. People rarely get help unless continuing with the current situation is worse. Try to help the current situation thus perpetuates the underlying problem.

whether or not any of this is true is utterly irrelevant to the points that you're supposedly responding to.

There's a reason for tough love approaches to addiction!

yes, and that reason is the rightist fantasy that being a piece of shit to people is a moral imperative.

 

[bleubird]

https://www.juneaucf.org/index.php/special-projects-juneau-housing-first/
LP,this works.Every city that has done this has SAVED money.

This can work for substance abusers but anything not fixed in place likely gets sold to support their habit. Try it on mental illness and you tend to get wrecked property.

They are supervised and have to meet requirements.They must get counseling and seek employment. It is not a motel. More like a half way house.

 

[Canard DuJour]

This is assuming we have accurate income numbers from back then.

Strangely enough there was a period in which the tax code was brutal to high personal income--during which personal income was a lot lower than either before or after. This was a period where there were a lot of legal tax avoidance schemes and little ability to detect tax evasion by the rich.

The cited study compares bottom 90% share of GDP across time, which grew apace with GDP until ~1975. Tax evasion by the top decile wouldn't make much difference either way.

The tax evasion thing is usually trotted out in response to the observation that higher marginal tax rates before ~1975 didn't negatively affect GDP growth. Perhaps you're getting confused with that.

The article also implies, indeed is built on the idea, that the total economic output right now would be the same if the (unnamed) policy changes that helped created further inequality had not been implemented since 1975, and presumably alternative policies that kept inequality at the same level had been implemented instead.

But why should I, or you, believe that to be true? Indeed, what if the worsening inequality decreased total economic output?

Then the bottom 90% would have been even better off again by now. As is likely the case - as indeed the article notes :

"But as wages stagnated after 1975, so too did consumer demand; and as demand slowed, so did the economy. A 2014 report from the OECD estimated that rising income inequalityknocked as much 9 points off U.S. GDP growth over the previous two decades - a deficit that has surely grown over the past six years as inequality continued to climb. That’s about $2 trillion worth of GDP that’s being frittered away, year after year, through policy choices that intentionally constrain the earning power of American workers."​

 

[Metaphor]

Then the bottom 90% would have been even better off again by now. As is likely the case - as indeed the article notes :

"But as wages stagnated after 1975, so too did consumer demand; and as demand slowed, so did the economy. A 2014 report from the OECD estimated that rising income inequalityknocked as much 9 points off U.S. GDP growth over the previous two decades - a deficit that has surely grown over the past six years as inequality continued to climb. That’s about $2 trillion worth of GDP that’s being frittered away, year after year, through policy choices that intentionally constrain the earning power of American workers."​

But that's my point: a model that simply takes the inequality at one point in time, and applies that level of inequality to the GDP of another point in time, says nothing about cause and effect and does not speak to the complications of an economy.

And again, what specific policies 'constrained' the earning power of American workers? How have they shown that the policies caused the constraint, and the constraint caused the increased inequality?