Friday, May 08, 2009

Say what?

The other day, Politico ran an article noting that Barack Obama had carried the "affluent vote" - those voters making more than $200,000 a year - with 52% of the total and wondering breathlessly if, or more exactly when, his support among such influential people would collapse in the face of Obama daring to do what he said he would do during the campaign, such as raising taxes on those making more than a quarter-million dollars a year.

There was a lot of tut-tutting about how "these voters are not being repaid for their support" and hand-wringing about the concerns and feelings of those such as couples making more than $250,000 who won't be able to deduct the sales taxes on new cars they buy this year on their 2009 returns. Amid all that comes this gem:
“A person making $250,000 isn’t wealthy,” said Dean Baker of the Center for Economic and Policy Research. “They still have to work for a living.”
And I have to ask: Who the hell are you people? What world do you live in? Where is this magical kingdom where being able to deduct the sales tax on your new Lexus or Jag is a matter for attention and the the definition of "wealthy" is, apparently, never having to work at all but just clipping coupons?* It sure as hell is no place I've ever been.

According to US Census Bureau figures for 2006 (the most recent available), households with incomes of $175,000 or more were in the richest 5% of all American households. Of a little over 116 million total households, only 2.24 million had incomes in excess of $250,000 - that puts them in the richest 1.9% of Americans.

And they're griping about how tough they have it? I don't care one whit that most of the households making that quarter-mill-plus are clustered at the lower end of that range. It still means their household income exceeds that of more than 98% of their fellow American households and they are making over five times the median household income. That's not wealthy?

Put it another way: The article states that there were 4 million tax returns for earners of more than $200,000 in 2006. It also says that in that same year, there were 92.7 million tax returns filed. That means those $200,000+ earners were the richest 4.3% of filers; they made more than over 95% of the people who filed returns. Add the fact of those who didn't even have to file because they didn't make enough, and the percentage of those who they out-earned grows. That's not wealthy?

Put it a third way: Look at this graph. It was from a letter sent out by the Federal Reserve Bank of San Francisco in September 2007. It tracks the ratio of earnings of two different sets of income percentiles from 1967 to 2005. The meaning is not immediately obvious, so I'll explain. The dotted line represents the ratio of the 50th percentile income level to the 20th percentile income level. The ratio remained fairly steady at about 2.4:1 over that time: That is, the yearly income at the 50th percentile was roughly 2.4 times that of the 20th percentile and remained so over that 38-year period.

The solid line is the ratio of the income of the 95th percentile to the 50th percentile. In 1967, that ratio was 2.6:1. Those at the 95th percentile earned about 2.6 times as much as those at the 50th percentile. But that ratio did not remain even roughly constant; it grew steadily until by 2005 it was 3.6:1. Simply put, in comparison to the rest of us, the rich, those at the 95th percentile, were getting richer. Pulling away. They were not just richer than the vast majority of us, they were getting more richer than the vast majority of us.

Yet even the generally progressive Center for Economic and Policy Research is insisting someone making $250,000 a year "isn't wealthy," almost like they were just another working stiff. And that is pathetic nonsense which shows how distorted not only our economy is but our perceptions as well, as people making a quarter-million dollars a year "don't feel rich," apparently because they have costs to meet and bills to pay - without recognizing that the fact they can afford those expenses for things far beyond what most can have is what makes them rich. Yes, the rich "were disproportionately hit" by the banking collapse but they were also the ones who disproportionately gained over the preceding four decades and it never seems to register with them or with those who observe and fret over their condition that what they lost was more than most of their fellow citizens will ever have.

Our sense of values is seriously, seriously out of whack.

*The phrase "clipping coupons" is old slang for the activities of the idle rich whose income was derived from dividends and thus did not depend on their own work but on the labor of others. In his poem "Advertisement for the Waldorf-Astoria," Langston Hughes had these lines:

Have luncheon there this afternoon, all you jobless.
     Why not?
Dine with some of the men and women who got rich off of
     your labor, who clip coupons with clean white fingers
     because your hands dug coal, drilled stone, sewed gar-
     ments, poured steel to let other people draw dividends
     and live easy.

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