How the rich keep geting richer,look over there!

cybercoma · April 25, 2013

Except that the data shows otherwise. Here's income curves in Canada for the bottom two quintiles. Clearly, their income has been rising.

She said "real income", which is adjusted. This doesn't seem to be what those charts are showing.

jacee · April 25, 2013

It's difficult to have this discussion with Canadian data because StatsCan generally reports by quintiles, large groupings that mask significant facts.

It's also a bit misleading to look only at income, when wealth accumulation tells the real story.

Here's the real story in the US:

And the world:

And here are the differences among

What people think the wealth distribution looks like

What people think it should be ideally

What it really is:

Edited April 25, 2013 by jacee

carepov · April 25, 2013

Here is some Canadian data, what do you think cyber and jacee?

c_4_22_2_1_eng.png?20121002200135533

http://www4.hrsdc.gc.ca/[email protected]?iid=22

c_4_23_2_1_eng.png?20121002200110346

http://www4.hrsdc.gc.ca/[email protected]?iid=23

The average Canadian today is spending a lower percentage of their income on necessities (food, shelter, and clothing) compared to 40 years ago. The cbc article does a pretty good job explaining this:

http://www.cbc.ca/ne...ood-prices.html

Edited April 25, 2013 by carepov

cybercoma · April 25, 2013

It's funny how jacee criticizes StatsCan for using quintiles, then presents data that uses quintiles.

jacee · April 25, 2013

Not to minimize their challenges, but the issue isn't low income.

Rather, the issue is the decimation of the middle income groups and acquisition of larger and larger percentages of the wealth by the extremely wealthy.

jacee · April 25, 2013

It's funny how jacee criticizes StatsCan for using quintiles, then presents data that uses quintiles.

True, the last two do.

It's the first one that tells the tale, though:

It's really the top 5% whose share of the wealth -almost 60% - is extremely out of whack.

Edited April 25, 2013 by jacee

Canuckistani · April 25, 2013

Except that the data shows otherwise. Here's income curves in Canada for the bottom two quintiles. Clearly, their income has been rising.

Stats Can does not seem to agree with you: http://www4.hrsdc.gc.ca/[email protected]?iid=22 c_4_22_2_1_eng.png?20121002200135533

GostHacked · April 25, 2013

Do any of those graphs include adjustments for inflation rates and cost of living factored in?

Making 25,000 today is a measly salary where as 20 years ago, 25,000 yearly salary was considered pretty good.

Canuckistani · April 25, 2013

Do any of those graphs include adjustments for inflation rates and cost of living factored in?

Making 25,000 today is a measly salary where as 20 years ago, 25,000 yearly salary was considered pretty good.

Just read the title of the one I posted and you'd know that. Note also the discrepancy in incomes - Stats Can shows an after tax income of well under 20k for the lowest quintile, Bonam's unsourced graph has it at 23k.

Edited April 25, 2013 by Canuckistani

cybercoma · April 25, 2013

Stats Can does not seem to agree with you: http://www4.hrsdc.gc.ca/[email protected]?iid=22

The trickle-down effect at work. :rolleyes:

Can we dispel with this myth yet?

eyeball · April 25, 2013

Myth? Cherished belief seems more like it except...it's actually a case study in the real and wilful suspension of disbelief.

Bonam · April 25, 2013

The trickle-down effect at work.

All three line are rising from about 1998 onwards in that graph. Top line went from ~100k to ~135k. Middle line went from ~42k to ~52k. Bottom line also went up but it is hard to read cause of the scale of the graph. All quintiles are gaining in real (inflation adjusted) dollars. So what is the problem?

If anything, the data shows that modern economic policies/conditions (over the last ~15 years) have been effective in boosting real incomes, while the policies/conditions in place for the ~20 years prior to that led to wage decline and stagnation.

(As for the graphs I posted earlier, are, I think the top cutoff of each quintile, rather than the average of each quintile, hence the differences in values, but they all follow the same shape, with declines from the 70s to the 90s and then an increase from the 90s to now. Regardless, all the data points to growth in inflation-adjusted income at all levels.)

Edited April 25, 2013 by Bonam

Canuckistani · April 25, 2013

More from stats Can:

The top 1% of Canada's 25.5 million tax filers accounted for 10.6% of the nation's total income in 2010, down from a peak of 12.1% in 2006.

In the early 1980s, the top 1% of tax filers held 7.0% of the total income reported by all tax filers. This proportion edged up to 8.0% in the early 1990s and reached 11.0% by the early 2000s.

In 2010, a tax filer required an annual income of $201,400 to be in the top 1%. This was 37% higher than the threshold value of $147,500 in 1982, when the data series began. (All dollar figures in this text are expressed in 2010 constant dollars.)

The income gap between the top 1% and the rest of filers has widened over time. In 1982, the median income of the top 1% of filers was $191,600. This was seven times higher than the median income of $28,000 for the other 99% of filers.

By 2010, the median income of the top 1% of filers increased to $283,400, about 10 times higher than the median income of $28,400 for the rest.

In 1982, the richest 1% of filers paid 13.4% of federal and provincial or territorial income taxes. This proportion rose steadily to a peak of 23.3% in 2007, then slipped to 21.2% in 2010. The share of income taxes paid by the rest of all tax filers fell from 86.6% in 1982 to 78.8% in 2010.

The median federal and provincial income tax paid by the top 1% of filers was $60,900 in 1982. By 2010, this median had increased 48% to $90,100. By contrast, the median for the rest of tax filers fell from $2,800 in 1982 to $1,800 by 2010.

http://www.statcan.gc.ca/daily-quotidien/130128/dq130128a-eng.htm283/

So the rich (ie 1%) are got richer by 48% while everybody else, lumped together got richer by a whole $400 = 1%. That shows what the problem is. The median income for 99% of the population has remained static while the top 20% and especially the top 1% have way enriched themselves. Not a way to keep a country cohesive. More like corrosive.

Michael Hardner · April 25, 2013

cybercoma, on 25 Apr 2013 - 13:19, said:

The trickle-down effect at work.

Can we dispel with this myth yet?

Numbers are good at dispelling myths, I agree.

But, you know as well as I do, myths die regardless of their politics. The poor aren't losing ground, according to this.

Canuckistani · April 25, 2013

You mean the low income folks actually have to earn less money for you to say they're losing ground? Seems to me to if they're not partaking of the increase in GDP while the higher earners are, that is losing ground. It is relative, seems to me. Especially considering the corrosive social and health effects of greater inequality.

carepov · April 25, 2013

You mean the low income folks actually have to earn less money for you to say they're losing ground? Seems to me to if they're not partaking of the increase in GDP while the higher earners are, that is losing ground. It is relative, seems to me. Especially considering the corrosive social and health effects of greater inequality.

Point 1: The low-income rate is at a record low:

c_4_23_2_1_eng.png?20121002200110346

http://www4.hrsdc.gc.ca/[email protected]?iid=23

Point 2: People in low income move out of the low-income quintile every year.

c_4_83_2_5_eng.png?20121002200126252

http://www4.hrsdc.gc.ca/[email protected]?iid=83

Edited April 25, 2013 by carepov

April 25, 2013

Do any of those graphs include adjustments for inflation rates and cost of living factored in?

Making 25,000 today is a measly salary where as 20 years ago, 25,000 yearly salary was considered pretty good.

Not sure what you're basing this "pretty good" on, but having gone through the 90s myself I don't ever remember anyone considering an income in that range as "pretty good".

Edited April 25, 2013 by Kenneth

GostHacked · April 25, 2013

Not sure what you're basing this "pretty good" on, but having gone through the 90s myself I don't ever remember anyone considering an income in that range as "pretty good".

Ok, how about the 1980s then. No? 1970s? How far back does one need to go to see that 25,000 was a good wage>? Edited April 25, 2013 by GostHacked

Canuckistani · April 25, 2013

Point 1: The low-income rate is at a record low:

http://www4.hrsdc.gc.ca/[email protected]?iid=23

Point 2: People in low income move out of the low-income quintile every year.

http://www4.hrsdc.gc.ca/[email protected]?iid=83

Look at the upper graph again and ponder the meaning of a quintile.(Hint = 1/5 of the population). That bottom quintile income has not gone up since 1976 in constant dollars. Bringing in the LICO is just a red herring.

Edited April 25, 2013 by Canuckistani

carepov · April 25, 2013

That bottom quintile income has not gone up since 1976 in constant dollars. Bringing in the LICO is just a red herring.

Correct, the bottom quintile income has not gone up - it has not gone down either as others have claimed.

Point 2 was: people move in and out of the low income quintile every year.

Also, the middle 60% has gone up - unlike many claims of an "eroding middle class"

LICO is not a red herring, poverty is at a historic low point - surely this is significant.

April 25, 2013

Ok, how about the 1980s then. No? 1970s? How far back does one need to go to see that 25,000 was a good wage>?

You stated 20 years ago and that's what my response deals with.

Edited April 25, 2013 by Kenneth

MiddleClassCentrist · April 25, 2013

Numbers are good at dispelling myths, I agree.

But, you know as well as I do, myths die regardless of their politics. The poor aren't losing ground, according to this.

Losing ground would be a widening income gap by percentage.

The gap is widening.

Top line went from ~100k to ~135k. Middle line went from ~42k to ~52k.

42/100 = 42%

52/135 = 38.5%

And that top figure includes a lot of people with stagnant or dropping wages. The top 20% starts at ONLY 60k/year... http://www2.macleans.ca/2011/10/25/rank-your-income-where-do-you-stand-compared-to-the-rest-of-canada/

$60,000/year is not rich... not wealth. That is quite middle class.

Argus · April 25, 2013

http://www.cra-arc.gc.ca/myths/#m1

But It is true that some who are under the minimum income need not file. If you want benefits, such as child tax credits, you need to file.

So what do you think? Is a person who doesn't file ever going to be chased down?

Depends. Not everyone has to file. The need to file depends on income. As to whether you can be 'chased down' for not filing, presuming you are actually required to file, that in turn depends on your income source. CRA has a number of ways of determining whether you are getting income which you are not reporting. Just to start off , if you work for someone and get a T4 slip, then CRA knows to expect a return from you, if the money received is over the threshold. If you're self-employed, and in one of the more notorious professions for under reporting, CRA has a number of formulas for determining how much you probably made, and then expecting a return based on that. If you don't file one they will get in touch with you. If your income comes from a foreign government Canada has a an agreement with, such as the IRS, then the IRS will let CRA know you received money. If you are an independent business person, such as a contractor, and not collecting GST or reporting income, sooner or later someone is going to tip off CRA and you'll be facing an audit.

Michael Hardner · April 25, 2013

Losing ground would be a widening income gap by percentage.

The gap is widening.

42/100 = 42%

52/135 = 38.5%

Given the flatness of the line, it seems to almost have been done by design. Perhaps it can also be said that the slight rise in the yellow line is by design too. I think if people don't like this situation, they should demand better. The bottom 20% votes about 7% less often than the top 20%. Maybe that's something.

Argus · April 25, 2013

what does that have to do with anything?

It's really very simple. If Mr Rockefeller is paying 10% of the tax in the country but owns 90% of all the wealth, well, no one is going to be shedding any tears for him.

Now according to wiki http://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States the top 10% of Americans own 80% of all that country's wealth. So it's unsurprising that this group would and should be paying the majority of taxes. However, this fails to really tell the full story. Your chart is incomplete in that it doesn't say what it means by 'taxes". Does it mean federal income taxes, all income taxes, all taxes?

And there's more to it than that since we know the middle class is being squeezed by taxes. The complaint is not against the top 20% but the top 1%, and even then it's more like the top 10% of the top 1%. It's not the doctors and lawyers but the stockbrokers and CEOs who are being undertaxed, along with corporations.

Also, paying a percentage of taxes understates the point in that Americans as a whole are paying far too few taxes. That's why they have a massive deficit. Much of the 'missing taxes' comes from the tax loopholes and tax cuts which disproportionately benefited corporations and the wealthy elites. US politicians have cut their taxes in response to bribery, but, afraid of the wrath of taxpayers, they have been reluctant to cut services. Instead, they've been borrowing to make up the difference.