Tuesday, August 21, 2007
Gotta Love That Bush Economy...If You're A Millionaire
Adjusted for inflation, we're making less money per year now than we were in 2000.
2000 was the last year before the Mayberry Machiavellis came into office, cut taxes for millionaires and billionaires and helped engineer an economy that squeezes the working and middle classes and forces them to work longer and harder to make less.
But if you make more than $1 million a year, then you're taking home a lot more than you were in 2000:
Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows.
While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show.
Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945.
The growth in total incomes was concentrated among those making more than $1 million. The number of such taxpayers grew by more than 26 percent, to 303,817 in 2005, from 239,685 in 2000.
These individuals, who constitute less than a quarter of 1 percent of all taxpayers, reaped almost 47 percent of the total income gains in 2005, compared with 2000.
People with incomes of more than a million dollars also received 62 percent of the savings from the reduced tax rates on long-term capital gains and dividends that President Bush signed into law in 2003, according to a separate analysis by Citizens for Tax Justice, a group that points out policies that it says favor the rich.
The group’s calculations showed that 28 percent of the investment tax cut savings went to just 11,433 of the 134 million taxpayers, those who made $10 million or more, saving them almost $1.9 million each. Over all, this small number of wealthy Americans saved $21.7 billion in taxes on their investment income as a result of the tax-cut law.
The nearly 90 percent of Americans who make less than $100,000 a year saved on average $318 each on their investments. They collected 5.3 percent of the total savings from reduced tax rates on investment income.
Republicans plan to use the old "Dems are tax and spenders" meme in '08 to try and paint Dems as fiscally irresponsible, but Big Picture notes that Americans seem to know just how screwed they've been over the Bush years on the economic front and know who to take their anger out on.
The most recent Wall Street Journal poll, taken in late July and early August, found that 2/3rds of Americans think the economy is either in recession or heading for one. The same poll found that more than 2/3rds think that America is on the wrong track. They are distrustful of Washington (especially the president, but also the Congress), but they're also distrustful of
financial industry, large corporations in general and energy, drug and insurance companies in particular.
Big Picture also notes that Wall Street and the Feds have been using "Bullshit Math" to make the stats look better than they really are:
So long as we are popping economic myths, let's also dispatch with the 4.5% unemployment rate. That number has been largely caused by several million exhaustees and others simply leaving the work force.
The actual unemployment rate is closer to 6.5%. And if we measured it the way the Europeans do, its closer to 8%. This explains why wages and labor costs have remained subdued despite the alleged 4.5% UE measure.
Anyone with more than 4 functioning brain cells should be able to figure out that a 4.5% unemployment rate would be causing huge labor shortages and wage increases.
Instead, the average income gain is merely a measure of inflation: reported gains reflect increased costs for medical care -- the exact same coverage (but with a higher copay) which costs 15% more year-over-year shows up as increased total wages.
So while the government and the Wall Street guys fudge the stats and make everything look good fundamentally, the experiences of people on Main Street are telling them that something is rotten in Bush's Ownership Society.
People know that they're working longer and harder to make less. They know that they've had to borrow to live the lifestyle they used to live just a few years ago. And now with interest rates rising and home prices tanking, they can't borrow any more. Since inflation has eaten away any wage gains they've made, they know they're worse off than they were before Bush and Company took power.
POSTSCRIPT: Treasury Secretary Henry Paulson just said on CNBC that the "economy is strong" and "will continue to grow, create jobs and raise standards of living for all Americans."
Uh, huh - as long as you're using the Bullshit Math.
But in reality, Paulson's right about that only if you're making $1 million or more a year.
Otherwise, you're fucked.