Trends in income inequality relative to GDP
There are no clever mathematical models here, only facts. No Nobel prize for me.
I analysed income per family divided by GDP per family. First look at the 90% majority:
Since about 1970, their average share of income relative to GDP has steadily declined, from almost half, to about a third.
The next chart (IncomeGDPTax.png) shows a number of things: first look at the lines for top tax rate and GDP per family. The tax rate does not significantly affect the GDP growth, which is steady apart from the stagflation period in the 70s which was followed by the technology boom of the 80s and 90s.
Cutting top tax rates does not stimulate GDP growth.
Next, look at the average income per family for a range of groups (see the right hand column of the legend). Observe the time correlation with the tax rate line.
Reducing top tax rates transfers income from the majority to the very highest earners.
Incomes: Alvaredo, F., Atkinson, A. B., Piketty, T. and Saez, E. The World Top Incomes Database, http://g-mond.parisschoolofeconomics.eu/topincomes, 14/05/2011
GDP: Bureau of Economic Analysis, http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=5&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=1945&LastYear=2010&3Place=N&AllYearsChk=YES&Update=Update&JavaBox=no
Tax rates: http://www.truthandpolitics.org/top-rates.php
"The world is a rigged game"
Matt Taibbi at Rolling Stone: “Word has leaked out that the London-based firm ICAP, the world’s largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world’s largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.”
On winning and values
So, right-wingers, you want a society where families are stable, where everybody looks like you and shares your Christian faith, and where the government pretty much stays out of your business? It’s not in some Randian fantasy, it’s right here in the USA.
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