Are The Rich Getting Richer and the Poor Getting Poorer?

Unfortunately, the government isn’t helping answer the question.

US government statistics on income inequality are mostly bogus for many reasons. They don’t adjust for shifts in the age of the population (older people are richer), for emigration (emigrants generally start poor), number of hours worked (shouldn’t someone doing three jobs have more?), or the composition of the “households” being measured (more single households among the poor means they are probably doing better financially but will show up as doing worse and the number of single households has sharply increased.)

In addition, the government doesn’t count some things as income that it should (earned income tax credit checks, housing vouchers) and does count things it should not (capital gains are not earned income, they are just trades of one asset for another.

So, the truth is hard to figure out. Still it seems a reasonable surmise that at least some rich are getting a lot richer (the crony capitalists), while other rich are not and the poor are indeed getting poorer. However, it’s always good to have one’s assumptions challenged and the article below does that. It adjusts “households” into individuals, and looked at that way, says the share of incomes from the bottom to the top has not changed much in recent years, that the income inequality “crisis” is not supported by the facts.

I am still guessing that crony capitalism is skewing the income patterns, but of course it is true that there are many beneficiaries of it who are not rich. Even the public employee in California  making over $800,000 does not quite make it to income millionaire status.

Click here for the story.

15 comments
Curtis Owens
Curtis Owens

..... I thought this was something that had been confirmed years ago.

Daniel Howell
Daniel Howell

What was the point of saying "capital gains are not earned income, they are just trades of one asset for another" in this article? If captial gains were not counted in income statistics, they would be even more skewed to reflect middle class people as "rich" and actual rich people as "middle class" or "poor". The person earning a $200,000 salary is almost certainly not as "rich" as the person who sold an asset for a capital gain of $200,000.

LiberatedCit
LiberatedCit

The middle class are getting poorer they are the ones who pick up the tab

 

Cash value of welfare spending to households in poverty greater than median household income

 

http://dailycaller.com/2012/12/07/cash-value-of-welfare-spending-to-households-in-poverty-greater-than-median-household-income/

 

Middle Class--Not the Rich or the Poor--Pay Majority of Federal Taxes, Says CBO Data

 

http://cnsnews.com/node/68094

 

'Welfare Spending Equates to $168 Per Day for Every Household in Poverty'

 

http://www.weeklystandard.com/blogs/welfare-spending-equates-168-day-every-household-poverty_665160.html

 

Where Do You Rank as a Taxpayer?

 

Read more at http://www.kiplinger.com/features/archives/how-your-income-stacks-up.html#K8O4gZKSODJaX5xa.99 

Edgar A. Darwin
Edgar A. Darwin

I have been listening to a program on Sunday mornings that like minded people might enjoy: it is from the Von Mises institute, and it is broadcasted on Kion A.M. 1460 Salinas. You can get it on the internet. It is a great Libertarian and Austrian Economics site. I hope you tune it in and learn from it!

Bill Graff
Bill Graff

No. The poor are getting richer.

Carol Rea
Carol Rea

I can atest to that one..never rich, but could make my bills,etc..but now..nah..when will people that voted this man into office realize..THEY ARE NOT BETTER OFF AND THEY NEVER WILL BE!! he doesn't like them because they are black..he wants their support so he can become their dictator...not their mentor...gosh, what are those damn govment schools teaching kids today?

Psykho Ma Yang
Psykho Ma Yang

we need to end the FED, abolish the IRS, abolish the TSA, put the real criminals into jail, and impeach Obama. otherwise once the shit hit the fans, the idiotic Liberals can just only do is blame bush and the Republicans to kiss ass for obama.

Frances Scott
Frances Scott

Well Folks, Obama is for crony capitalism and that is the only kind of capitalism he is for.

Dorothy Heath
Dorothy Heath

We keep gettin poorer and poorer under this Socialist Govt!!! Time for a change I would say !!

Psykho Ma Yang
Psykho Ma Yang

how long has that been happening since we just noticed it this year of 2012?.... uuhhhh why did america put Obama back into office eversince nothing hasn't been resolved about the middle class issue??.... oh yea! he gave me a FREE PHONE and FOODSTAMPS!!! I don't even need to work for money at all!!! (facepalm) (-___-)

LiberatedCit
LiberatedCit

 @Daniel Howell 

I am not sure if you were replying to me or if I just don't have my settings correct but your response came to my inbox so I will respond I agree with you. People like the bailed out warren buffoon who is now calling for higher estate taxes use loopholes so the ultra rich are getting richer it is the middle class who end up being the debt slaves. 

 

Buffett Joins Soros in Effort to Raise Taxes on Estates

 

http://www.bloomberg.com/news/2012-12-11/buffett-joins-soros-in-effort-to-raise-taxes-on-estates.html

 

The real joke is unless they close the loopholes if they raise taxes it still won't affect the top 1% and notice the crony capitalist 's never call for that to happen they just call for more taxes for others. The Charitable Exemption should be done away with or capped. The people who run those make millions.

 

How Buffett Saves Billions On His Tax Return

 

http://www.forbes.com/sites/greatspeculations/2011/08/17/how-buffett-saves-billions-on-his-tax-return/

 

Warren Buffett Is A Punk

 

snip

 

Meanwhile, Buffett has given each of his kids a charitable foundation with billions each to manage. If a foundation has $3bb in it, then something like $90mm can go to salaries

 

http://techcrunch.com/2012/05/12/warren-buffett-is-a-punk/

 

Implementing Warren Buffett's Gift

 

The foundation must continue to satisfy the legal requirements qualifying Warren’s gift as charitable exempt from gift or other taxes

 

http://www.gatesfoundation.org/about/Pages/implementing-warren-buffetts-gift.aspx

 

Buffett’s Betrayal (firms got 95 Billion bailout cash)

 

http://blogs.reuters.com/rolfe-winkler/2009/08/04/buffetts-betrayal/