|
The Fair Government Organization
"The
money power of the country will endeavor to prolong its reign
by working upon the prejudices of the people
until all wealth is aggregated in a few hands."
Abraham Lincoln, 1864
(The Lincoln Encyclopedia, Archer Shaw, Macmillan Pub.)
"Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital."
Aaron Levenstein
(The Research Institute of America, a provider of research material for tax professionals)
Rush Limbaugh introduced an IRS
report ("Income Tax: Who Pays? IRS Figures for 2000")
with such propaganda as "UPDATED
FIGURES! Only The Rich Pay Taxes",
"The
Top 50% of Wage Earners Pay 96% of All Income Taxes"
and "IRS
data that will remain here forever, to combat the liberals'
tax-cuts-for-the-rich garbage".
I don't know if it's sad, ironic or pathetic,
that his advocacy of the Republican wealth-fare (i.e. "tax the poor
and let the rich clean-house") policies - is trumpeted using a report
that cries out for the total opposite conclusion. Rush Limbaugh couldn't care less that
the bottom 50%, the half that is not part of "the top 50% of
wage earners", has an average annual gross income of $13,000, or
that the next 25% only earns an average $40,000, or that together the
bottom 75% earns an average $21,000/yr - he still complains that they
aren't paying enough taxes. He couldn't care less that the data clearly shows that the top 1%
is on course to owning ALL the assets of this country. Or that during
the 14 years covered by the report, the average annual income of the
bottom 50% ('those that don't pay a lot of taxes') grew a measly $4,760
from $8,248 to $13,008, while the top 1% average income grew a whopping
$763,509, from $279,172 to $1,042,681.
The statistical data below is derived
from the same IRS report: "Statistics of Income Division, Unpublished Statistics, September
2002". The original IRS report uses "descending
cumulative percentiles" (i.e. it presents
statistical data for the "Top 1%", "Top 5%",
"Top 10%", "Top 25%" and "Top 50%" groups,
but each group includes the data of the previous one.
Click here to
see a side-by-side comparison of the IRS data vs. an unmasked version
of the same numbers.) This method is a
form of "blind statistics" and is used to mask group-specific
details. The report also completely hides the data of the "Bottom 50%"
(the "unimportant better to ignore HALF(!!)" of the working
class). By using "Descending Cumulative Percentiles" the average income FY2000
of the "Top 50%", which we all like to believe we are part of, is a decent $87,189.
This figure is skewed
heavily by the "Top 1-25%" groups that are folded into the
group and hiding the fact that the average "Top 50%",
excluding the "Top 1%" with multi million dollar annual incomes and
the other wealthy groups, only earns $39,804 (table C). Using
"Ascending Non-Cumulative Percentiles" instead, will show that
the
average income of a full 75% (the "bottom 75%") of US wage
earners is only $22,000. But that fact would not serve the
administration well, so they hide it with statistical magic. The data we
used below is the IRS data but we separated the groups to reveal the true
conditions of the working class of the USA.
| A.
Number of Individual Income Tax Returns filed: [1] |
| Year |
Top 1% |
Top 1-5% |
Top 5-10% |
Top 10-25% |
Top 25-50% |
Bottom 50% |
Total |
| 1986: |
1,020,876 |
4,083,505 |
5,104,381 |
15,313,144 |
25,521,905 |
51,043,811 |
102,087,622 |
| 1987: |
1,061,548 |
4,246,190 |
5,307,738 |
15,923,214 |
26,538,690 |
53,077,380 |
106,154,760 |
| 1988: |
1,088,729 |
4,354,914 |
5,443,643 |
16,330,928 |
27,218,215 |
54,436,429 |
108,872,858 |
| 1989: |
1,113,127 |
4,452,509 |
5,565,636 |
16,696,909 |
27,828,180 |
55,656,361 |
111,312,722 |
| 1990: |
1,128,123 |
4,512,490 |
5,640,613 |
16,921,840 |
28,203,066 |
56,406,132 |
112,812,264 |
| 1991: |
1,138,041 |
4,552,164 |
5,690,205 |
17,070,616 |
28,451,026 |
56,902,052 |
113,804,104 |
| 1992: |
1,126,528 |
4,506,110 |
5,632,638 |
16,897,914 |
28,163,190 |
56,326,380 |
112,652,760 |
| 1993: |
1,136,814 |
4,547,255 |
5,684,070 |
17,052,208 |
28,420,347 |
56,840,694 |
113,681,388 |
| 1994: |
1,149,899 |
4,599,597 |
5,749,496 |
17,248,488 |
28,747,480 |
57,494,960 |
114,989,920 |
| 1995: |
1,172,742 |
4,690,967 |
5,863,710 |
17,591,127 |
29,318,547 |
58,637,093 |
117,274,186 |
| 1996: |
1,194,418 |
4,777,670 |
5,972,089 |
17,916,265 |
29,860,442 |
59,720,884 |
119,441,768 |
| 1997: |
1,215,033 |
4,860,131 |
6,075,164 |
18,225,493 |
30,375,821 |
60,751,642 |
121,503,284 |
| 1998: |
1,237,758 |
4,951,034 |
6,188,791 |
18,566,375 |
30,943,957 |
61,887,915 |
123,775,830 |
| 1999: |
1,260,090 |
5,040,359 |
6,300,448 |
18,901,347 |
31,502,243 |
63,004,487 |
126,008,974 |
| 2000: |
1,282,271 |
5,129,086 |
6,411,357 |
19,234,072 |
32,056,786 |
64,113,572 |
128,227,144 |
Source: IRS, Statistics of Income Division, Unpublished Statistics, September
2002 Recent
| B1.
Total Adjusted Gross Income of group (millions of dollars): |
| Year |
Top 1% |
Top 1-5% |
Top 5-10% |
Top 10-25% |
Top 25-50% |
Bottom 50% |
Total |
| 1986: |
285,197 |
323,270 |
278,043 |
603,663 |
613,396 |
420,555 |
2,524,124 |
| 1987: |
346,635 |
375,586 |
316,000 |
671,168 |
664,480 |
439,859 |
2,813,728 |
| 1988: |
473,527 |
417,175 |
341,834 |
718,324 |
707,005 |
466,291 |
3,124,156 |
| 1989: |
468,079 |
450,342 |
368,118 |
767,939 |
750,757 |
493,623 |
3,298,858 |
| 1990: |
483,252 |
470,085 |
384,695 |
806,145 |
788,360 |
518,700 |
3,451,237 |
| 1991: |
456,603 |
486,747 |
399,852 |
831,563 |
809,238 |
532,139 |
3,516,142 |
| 1992: |
523,586 |
507,507 |
412,691 |
855,617 |
831,999 |
549,152 |
3,680,552 |
| 1993: |
520,586 |
527,666 |
426,211 |
883,490 |
854,346 |
563,279 |
3,775,578 |
| 1994: |
546,700 |
556,384 |
449,121 |
928,869 |
890,278 |
589,794 |
3,961,146 |
| 1995: |
619,610 |
603,113 |
481,790 |
985,307 |
937,722 |
617,065 |
4,244,607 |
| 1996: |
736,545 |
657,260 |
515,344 |
1,043,488 |
991,746 |
646,144 |
4,590,527 |
| 1997: |
872,826 |
724,281 |
554,294 |
1,116,199 |
1,060,392 |
695,465 |
5,023,457 |
| 1998: |
1,010,245 |
786,402 |
597,069 |
1,195,884 |
1,131,830 |
747,781 |
5,469,211 |
| 1999: |
1,152,820 |
858,943 |
641,072 |
1,274,473 |
1,198,856 |
783,165 |
5,909,329 |
| 2000: |
1,336,773 |
930,630 |
687,983 |
1,358,400 |
1,275,969 |
834,222 |
6,423,977 |
See Table-C below for "Change of
Average Income per Filer"
Source: IRS, Statistics of Income Division, Unpublished Statistics, September
2002 Recent
|
B2. Change of group's Share of All Income: |
|
Year
|
Top 1% |
Top 1-5% |
Top 5-10% |
Top 10-25% |
Top 25-50% |
Bottom 50% |
Bottom 75% |
|
1986: |
11.3% |
12.8% |
11.0% |
23.9% |
24.3% |
16.7% |
41.0% |
|
2000: |
20.8% |
14.5% |
10.7% |
21.1% |
19.9% |
13.0% |
32.8% |
|
% Change: |
84.2% |
13.1% |
-2.8% |
-11.6% |
-18.3% |
-22.1% |
-19.8% |
Since 1988 the income of the "top 1%"
exceeded that of the entire bottom 50%! By now, the income of the
richest 1.3 million households is almost double that of the bottom 64
million households combined!
Source: IRS, Statistics of Income Division, Unpublished Statistics, September
2002
"In the 22 years between 1976 and
1998, the share of the nation's private wealth held by the top 1% nearly
doubled, going from 22% to 38%." Source:
101
Economic Facts, Office for Social Justice, St. Paul Minneapolis
Another report, "Recent Trends in Wealth Ownership" by
Edward N. Wolff, reveals that by 1997, the wealthiest 1%
possessed more wealth than did the entire bottom 95% of US
households, owning nearly half of all the capital wealth of the country.
"When calculating the proportion of the total increase in real household wealth between 1983 and 1998 accruing to different wealth groups, the results indicate that
the richest 1% received 53% of the total gain in marketable wealth over the period from 1983 to
1998, while the next 19 percent received another 39 percent. Combined,
the top 20% garnered 92% of the economic gains of the period." "Table 3 shows the absolute changes in wealth and income between 1983 and 1998. The results are even more striking. Over this period, the largest gains in relative terms were made by the wealthiest households. The top one percent saw their average wealth (in 1998 dollars) rise by 42 percent. The remaining part of the top quintile, as well as the second quintile, experienced increases from 21 to 24 percent. While the middle quintile gained 10 percent,
the poorest 40 percent lost 76 percent!"
Source: Trends in Wealth Ownership, 1983-1998, Edward N. Wolff
Also: Shifting
Fortunes, Chuck Collins, Betsy Leondar-Wright, Holly Sklar
| Table
2 |
| The
Size Distribution of Wealth and Income, 1983-1998 |
| |
Percentage
Share of Wealth / Income held by: |
| Year |
Top 1% |
Top
1-5% |
Top
5-10% |
Top
10-20% |
Top
20-40% |
Median
20% |
Bottom
40% |
| A. Net Worth |
| 1983 |
33.8
% |
22.3
% |
12.1
% |
13.1
% |
12.6
% |
5.2
% |
0.9
% |
| 1989 |
37.4
% |
21.6
% |
11.6
% |
13
% |
12.3
% |
4.8
% |
-0.7
% |
| 1992 |
37.2
% |
22.8
% |
11.8
% |
12
% |
11.5
% |
4.4
% |
0.4
% |
| 1995 |
38.5
% |
21.8
% |
11.5
% |
12.1
% |
11.4
% |
4.5
% |
0.2
% |
| 1998 |
38.1
% |
21.3
% |
11.5
% |
12.5
% |
11.9
% |
4.5
% |
0.2
% |
|
B. Financial
Wealth |
| 1983 |
42.9
% |
25.1
% |
12.3
% |
11
% |
7.9
% |
1.7
% |
-0.9
% |
| 1989 |
46.9
% |
23.9
% |
11.6
% |
11
% |
7.4
% |
1.7
% |
-2.5
% |
| 1992 |
45.6
% |
25
% |
11.5
% |
10.2
% |
7.3
% |
1.5
% |
-1.1
% |
| 1995 |
47.2
% |
24.6
% |
11.2
% |
10.1
% |
6.9
% |
1.4
% |
-1.3
% |
| 1998 |
47.3
% |
21
% |
11.4
% |
11.2
% |
8.3
% |
1.9
% |
-1.1
% |
|
C. Income |
| 1982 |
12.8
% |
13.3
% |
10.3
% |
15.5
% |
21.6
% |
14.2
% |
12.3
% |
| 1988 |
16.6
% |
13.3
% |
10.4
% |
15.2
% |
20.6
% |
13.2
% |
10.7
% |
| 1991 |
15.7
% |
14.8
% |
10.6
% |
15.3
% |
20.4
% |
12.8
% |
10.5
% |
| 1994 |
14.4
% |
14.5
% |
10.4
% |
15.9
% |
20.6
% |
13.6
% |
10.7
% |
| 1997 |
16.6
% |
14.4
% |
10.2
% |
15
% |
20.5
% |
12.8
% |
10.5
% |
Source: Trends in Wealth Ownership, 1983-1998, Edward N. Wolff
| C.
Average adjusted gross INCOME per filer (TAGI/returns): |
| Year |
Top 1% |
Top 1-5% |
Top 5-10% |
Top 10-25% |
Top 25-50%C1 |
Bottom 50% |
Bottom
75%C2 |
| 1986: |
$279,172 |
$79,099 |
$54,463 |
$39,443 |
$24,019 |
$8,248 |
$13,504 |
| 1987: |
$326,881 |
$88,550 |
$59,536 |
$42,140 |
$25,020 |
$8,290 |
$13,871 |
| 1988: |
$435,370 |
$95,754 |
$62,826 |
$43,966 |
$25,975 |
$8,560 |
$14,369 |
| 1989: |
$420,437 |
$101,067 |
$66,120 |
$45,997 |
$26,987 |
$8,876 |
$14,906 |
| 1990: |
$428,145 |
$104,155 |
$68,255 |
$47,631 |
$27,940 |
$9,201 |
$15,448 |
| 1991: |
$401,567 |
$106,982 |
$70,296 |
$48,739 |
$28,435 |
$9,349 |
$15,716 |
| 1992: |
$465,146 |
$112,736 |
$73,323 |
$50,657 |
$29,542 |
$9,747 |
$16,347 |
| 1993: |
$458,298 |
$116,114 |
$74,946 |
$51,782 |
$30,049 |
$9,905 |
$16,627 |
| 1994: |
$475,694 |
$120,880 |
$78,094 |
$53,860 |
$30,959 |
$10,262 |
$17,162 |
| 1995: |
$528,676 |
$128,545 |
$82,201 |
$55,994 |
$31,993 |
$10,522 |
$17,677 |
| 1996: |
$617,037 |
$137,515 |
$86,234 |
$58,215 |
$33,221 |
$10,817 |
$18,284 |
| 1997: |
$718,499 |
$148,967 |
$91,191 |
$61,233 |
$34,896 |
$11,440 |
$19,268 |
| 1998: |
$815,991 |
$158,755 |
$96,465 |
$64,418 |
$36,582 |
$12,086 |
$20,247 |
| 1999: |
$915,014 |
$170,424 |
$101,739 |
$67,403 |
$38,061 |
$12,428 |
$20,972 |
| 2000: |
$1,042,681 |
$181,514 |
$107,310 |
$70,604 |
$39,804 |
$13,008 |
$21,942 |
|
Change, 1986 to 2000: |
|
% CHANGE: |
273% |
129% |
97% |
79% |
66% |
58% |
62% |
|
$ CHANGE: |
$ 763,509 |
$ 102,415 |
$ 52,847 |
$ 31,161 |
$ 15,785 |
$ 4,760 |
$ 8,438 |
Source: IRS, Statistics of Income Division, Unpublished Statistics, September
2002
C2: The "bottom 75%" data was
derived by extracting and combining data from the IRS's report.
A full half of US workers earn an average income of $13,000. Even the next
group up (C1: the bottom half of the "Top 50%"), with a $40,000
AGI, cannot afford to pay taxes and live at the same time. While 99% of
US households just about doubled their average income from 1986 to 2000,
the top 1% nearly QUADRUPLED their average
income.
| D.
Average INCOME TAX per filer (dollars): |
| Year |
Top 1% |
Top 1-5% |
Top 5-10% |
Top 10-25% |
Top
25-50% |
Bottom 50% |
| 1986: |
92,559 |
15,122 |
8,711 |
5,111 |
2,520 |
464 |
| 1987: |
86,250 |
16,034 |
8,589 |
4,938 |
2,366 |
422 |
| 1988: |
104,563 |
17,098 |
8,837 |
5,198 |
2,493 |
434 |
| 1989: |
98,155 |
18,176 |
9,212 |
5,558 |
2,635 |
453 |
| 1990: |
99,580 |
18,338 |
9,294 |
5,722 |
2,721 |
461 |
| 1991: |
97,771 |
18,280 |
9,807 |
5,637 |
2,715 |
432 |
| 1992: |
116,425 |
19,379 |
10,250 |
5,769 |
2,783 |
428 |
| 1993: |
128,285 |
20,286 |
10,507 |
5,906 |
2,817 |
425 |
| 1994: |
134,218 |
21,691 |
11,096 |
6,232 |
2,917 |
443 |
| 1995: |
151,811 |
23,387 |
11,880 |
6,560 |
3,016 |
462 |
| 1996: |
178,016 |
25,704 |
12,721 |
6,908 |
3,165 |
476 |
| 1997: |
198,545 |
27,983 |
13,563 |
7,373 |
3,363 |
513 |
| 1998: |
221,375 |
30,397 |
14,273 |
7,494 |
3,338 |
537 |
| 1999: |
251,902 |
33,538 |
15,322 |
7,930 |
3,469 |
557 |
| 2000: |
286,156 |
36,408 |
16,608 |
8,503 |
3,696 |
598 |
Source: IRS, Statistics of Income Division, Unpublished Statistics, September
2002
We could add another table here
showing how much each group earned after taxes (table C minus table D)
to clarify why a "single rate" would be dreadful and unfair to 75% of the
US working class. But what is even more important is for us to
understand how much profit
(gross income minus reasonable living expenses) did each group
member make that year. While the "Top 5-10%" were marginally
profitable, only the "Top 1%" and "1-5%" groups actually
earned a truly taxable income - a profit in their lingo. If we deducted
an arbitrary "living expenses" allowance of say $40,000 (as
apposed to the puny $6,000 "standardized deductions"), we
would see that three quarters of us fall behind (i.e. accumulate
debt or can't afford basic needs) with every passing year
- and that's before taxes!
| E1.
Total income tax for group (millions of dollars): [3] |
| Year |
Top 1% |
Top 1-5% |
Top 5-10% |
Top 10-25% |
Top 25-50% |
Bottom 50% |
Total |
| 1986: |
94,491 |
61,749 |
44,463 |
78,273 |
64,313 |
23,690 |
366,979 |
| 1987: |
91,559 |
68,083 |
45,588 |
78,627 |
62,798 |
22,391 |
369,046 |
| 1988: |
113,841 |
74,462 |
48,108 |
84,886 |
67,848 |
23,616 |
412,761 |
| 1989: |
109,259 |
80,929 |
51,270 |
92,800 |
73,341 |
25,239 |
432,838 |
| 1990: |
112,338 |
82,750 |
52,426 |
96,826 |
76,735 |
25,986 |
447,061 |
| 1991: |
111,267 |
83,213 |
55,802 |
96,229 |
77,248 |
24,590 |
448,349 |
| 1992: |
131,156 |
87,323 |
57,734 |
97,487 |
78,370 |
24,093 |
476,163 |
| 1993: |
145,836 |
92,247 |
59,725 |
100,708 |
80,047 |
24,157 |
502,720 |
| 1994: |
154,337 |
99,769 |
63,796 |
107,500 |
83,854 |
25,498 |
534,754 |
| 1995: |
178,035 |
109,706 |
69,661 |
115,406 |
88,417 |
27,106 |
588,331 |
| 1996: |
212,626 |
122,807 |
75,971 |
123,760 |
94,520 |
28,440 |
658,124 |
| 1997: |
241,239 |
136,002 |
82,398 |
134,368 |
102,154 |
31,142 |
727,303 |
| 1998: |
274,009 |
150,497 |
88,330 |
139,128 |
103,276 |
33,212 |
788,452 |
| 1999: |
317,419 |
169,045 |
96,538 |
149,888 |
109,278 |
35,124 |
877,292 |
| 2000: |
366,929 |
186,741 |
106,480 |
163,556 |
118,473 |
38,342 |
980,521 |
| Total |
366,929 |
186,741 |
106,480 |
163,556 |
118,473 |
38,342 |
980,521 |
|
E2. 15 Year (1986-2000) Cumulative Income Taxes
Collected (millions) / Average Annual Income: |
|
Group |
Top 1% |
Top 1-5% |
Top 5-10% |
Top 10-25% |
Top 25-50% |
Bottom 50% |
Bottom 75% |
|
Taxes: |
2,654,341 |
1,605,323 |
998,290 |
1,659,442 |
1,280,672 |
412,626 Million! |
8,610,694 |
|
2000 AGI: |
$1,042,681 |
$181,514 |
$107,310 |
$70,604 |
$39,804 |
$13,008 |
$21,942 |
|
E3. Group's share of income-taxes (percentage): |
|
Year |
Top 1% |
Top 1-5% |
Top 5-10% |
Top 10-25% |
Top 25-50% |
Bottom 50% |
Bottom 75% |
|
1986: |
25.7% |
16.8% |
12.1% |
21.3% |
17.5% |
6.5% |
24.0% |
|
2000: |
37.4% |
19.0% |
10.9% |
16.7% |
12.1% |
3.9% |
16.0% |
|
CHANGE: |
45.3% |
13.2% |
-10.4% |
-21.8% |
-31.1% |
-39.4% |
-33.3% |
Source: IRS, Statistics of Income Division, Unpublished Statistics, September
2002
While ignoring the true picture
of our economy, which can be seen by looking at the first four tables,
this last table (E1) is all the wealth-fare supporters need to proclaim that the wealthy
need our sympathy. They simply mask the truth by using cumulative statistics.
Wealth-fare
supporters do an amazing job of convincing so many low-to-medium income
voters that
it would only be fair to increase the taxes for those who cannot cover
half their basic needs - yet decrease the taxes, by hundreds of thousands
to many millions a year, on those who pack away millions, and
increasingly billions, of dollars. Mind you-the stats
for the "Bottom 50%" were hidden in the report's
"Total" columns. I am not a conspiracy theorist so I must
contribute this fact to the "irrelevance" of that half of our
population to the statisticians at the IRS. |
