Data

There’s nothing better than data to back up an argument. Unless you’re talking to an imbecile who, when confronted with facts, will deny the veracity of the data and attack the source as a member of a conspiracy of some sort. In those cases, there’s nothing better than a gun to back up an argument.

Back to the point:

The US Census bureau has lots of data, and publishes a lot of reports that talk about who we are as a nation, and more importantly, where we’ve been. For instance, the creatively-titled Money Income in the United States report talks about just that. I’ll wait while you follow that link above and download the PDF.

Ready?

Turn to page 25. Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households: 1967 to 2001.

If you examine the Share of aggregate income columns, you will see that every quintile (20%) of the population has lost some of its share of income except for the highest quintile. In fact, most of this increase in share of income occurs for the highest-earning 5% of Americans. Note that these are households that last year made $150,499 and up (probably after taxes and deductions, but I’m not sure).

If you chart the percentages over time, you notice that the increases in income share for the highest-earning Americans begin around 1982. This is the Reagan tax cut. You will also notice that there is a huge jump from ’92 to ’93. This is the Bush recession. The interesting thing is that both the tax cut and the recession were opportunities for the highest-earners to get a larger share of aggregate income.

Let’s look at some real numbers, too. From 1982 to 1992, the upper limit for quintiles 1-4 rose 4%, 6%, 9%, and 11% respectively. The lower limit for the 5% of income-earners rose 14%.

This may be a gross simplification, but if there were any doubt in your mind that supply-side, “trickle-down” economics truly is “voodoo” economics, just look at the effects. The highest-earners raked it in while everyone lost out. It’s true that all incomes rose over the ten year period, but with inflation, those increases are either negligible or are in fact decreases.

That isn’t to say that trickle-down economics doesn’t work. It’s very effective at redistributing the income and wealth of this nation to the highest-earning and wealthiest Americans. It’s very effective at earning Republicans $2000 checks from a grateful wealth class. It just doesn’t do jack shit for the economy, and anyone who claims it’s Keynesian is full of shit.

What about Clinton?

Well, Clinton raised taxes on the wealthiest, but you will notice that this has little negative effect on income share for the highest-earners throughout Clinton-Gore. So either they didn’t raise taxes high enough, or they raised taxes on wealth (capital gains, etc.), or the economic expansion and tech bubble mitigated the tax increases, or higher-paying jobs generally saw faster wage inflation than lower-paying jobs.

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