Monday, June 25, 2018

Rising Income EQUALITY

Rising income EQUALITY may have helped elect Trump. When all the government transfers are factored in and no taxes on that "spendable income" the lowest quintiles are rising while others are going down. Some apparently see this as unfair. Shocking, right? I blogged about this years ago comparing a beginning librarian's salary (requires a master's degree) in my community with the transfer income of a woman who receives government benefits and works part time at a fast food restaurant. Wall St. Journal article today reports:

"The bottom quintile earned 2.2% of all earned income in 2013, but after adjusting for taxes and transfer payments, its share of spendable income rose to 12.9%—six times its proportion of earnings. The second quintile’s share more than doubled, rising from 7% of earned income to 13.9% of spendable income. For the third quintile, middle-income Americans, the increase was much smaller, from 12.6% to 15.4%.

Not surprisingly, high earners lost a considerable share of their earnings after taxes and transfers are taken into account. The fourth quintile’s share fell from 20.5% to 18.6%, while the top quintile dropped from 57.7% of earnings to 39.3% of consumable income. In other words, the top quintile’s share of earnings was 26 times that of the bottom quintile, but after taxes and transfer payments its share of spendable income was only three times as much. "

It would be political suicide to ever campaign on this--income inequality is the drum beat of both parties. But people do notice--just saying. Some even blogged about it years ago. Ironic isn't it, that the richest man in America, Jeff Bezos, who hates Trump with a passion, helped elect him.

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