Monday, April 28, 2014

1%ers Just a Flash

The top 1 percent, as I have noted here before, is such an unstable group that it makes no sense to write, as so many progressives do, about what has happened to its income over the past ten year or twenty years, because it does not contain the same group of people from year to year. Citing tax scholar Robert Carroll's examination of IRS records, Professor Rank notes that the turnover among the super-rich (the top 400 taxpayers in any given year) is 98 percent over a decade — that is, just 2 percent of that elusive group remain there for ten years in a row. Among those earning more than $1 million a year, most earned that much for only one year of the nine-year period studied, and only 6 percent earned that much for the entire period.

Count me a skeptic on conservative political answers or on anyone's 1%er whines.

Another good nugget:  As Rank hints, what is hereditary in the United States is not wealth but poverty. 

And the coup de grace:

Like most anticapitalists, Professor Piketty is taken with the question of inequality rather than with the separate question of poverty, and his focus is most intensely upon those high-earning managers of capital. But as Clive Crook notes in hisreview of the book, the question of whether income inequality widens in the future “won’t matter as much as whether and how quickly wages and living standards rise.” Which is to say, if the real standard of living for the poor and the middle classes continues to increase — as it has for virtually the entire history of modern capitalism — then it will not matter if the standards of living for the very wealthy increase even more quickly. On the other hand, if living standards decline or stagnate, it will not matter very much to anybody besides political entrepreneurs whether inequality also decreases. Higher standards of living across the board are perfectly compatible with higher levels of income inequality, a pattern that has been seen not only among such alleged practitioners of cowboy capitalism as the United States but also in European welfare states such as Sweden, where income inequality is increasing just as it is in the United States.

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