Posted by Tina
A new study suggests that Americans are a bit more equal than has been claimed in the income inequality debate. The study measures spending power rather than income and finds it’s a much more accurate measure:
spending inequality – what we should really care about – is far smaller than wealth inequality. This is true no matter the age cohort you consider.
Take 40-49-year-olds. Those in the top 1 percent of our resource distribution have 18.9 of net wealth but account for only 9.2 percent of the spending. In contrast, the 20 percent at the bottom (the lowest quintile) have only 2.1 percent of all wealth but 6.9 percent of total spending. This means that the poorest are able to spend far more than their wealth would imply – though still miles away from the 20 percent they would spend were spending fully equalized.
The fact that spending inequality is dramatically smaller than wealth inequality results from our highly progressive fiscal system, as well as the fact that labor income is distributed more equally than wealth.
The top 1 percent of 40-49-year-olds face a net tax, on average, of 45 percent. This means that the present value of their spending is reduced by the fiscal system to 55 percent of the present value of their resources. So someone in that age group who has resources with a present value of US$25.5 million can spend $14 million of it after fiscal policy.
For the bottom 20 percent, the average net tax rate is negative 34.2 percent. In other words, they get to spend 34.2 percent more than they have thanks to government policy (they get to spend, on average, $552,000 over their lifetimes, which exceeds their $411,000 in average lifetime resources).
See charts and methodology at the link provided above. The study can be read here.
I think I may have been rendered speechless with rage and wonderment.
Nearly.
HOW CAN YOU BE SO FREAKIN’ STUPID !!!!
HOW CAN YOU BE SUCH A CLOSED MINDED REDISTRIBUTION LOVING BUTTHEAD!!!!
Do you so loath the poor that you would not want more of them to give up feeling victimized and become upwardly mobile?
Can’t stand anyone having and putting out another perspective?
Unbelievable.
Pardon me. But I don’t think I’ve been presented with a more dishonest use of statistics … ever. This is, of course, a “conservative” specialty. But, I mean, really!
How can you, for a minute, think this muddle supports your position?
Of course some lawyer pulling down $850K cannot possibly spend it all, and he hereby fatally weakens our consumer driven economy.
Just … go grow brains that work, will you please.
Grow your own brains, meathead….must we continue in this childish back and forth?
Of course the Lawyer pulling down 850K cannot spend it all, thus, he invests lending his support to a stronger economy and more jobs. He may also give a portion to cancer research, fighting aids and malaria in Africa, or the Salvation Army.
What? Did you imagine he’s hording it in a locked vault in his basement? Idiot!
What he spends also strengthens the economy. The lawyer spends on house/s, furnishings, cars, boats, jewelry, restaurants, vacations, massages, the gym, and ordinary stuff like groceries, healthcare, haircuts, underwear, suits, shirts, socks and ties. Who benefits from this spending? All of the people who work in those areas of service, manufacturing and sales…it’s called trickle down Dearie and it’s the only thing that works! When the people have more of their own money to spend and invest the economy grows and there is more opportunity for everyone.
And by the way, this “muddle, as you call it is information tht is as viable and useful as any other type of study. You can take it or leave it. Nobody is forcing it down your throat…
OR ARE YOU ONCE AGAIN STANDING ON THE SIDE OF LIMITING SPEECH!!!