In the light of the Occupy protests going on around the country and around the world the CBO report of income trends has received considerable attention, at least in the media and in the political blogosphere. This chart of the growth in real after tax income from 1979 to 2007 is receiving particular notice. I’m rather surprised that I’ve seen so little commentary about what jumped out at me from the chart: real incomes have grown in all sectors over the last thirty years. I would have thought that real income in the lowest quintile would actually have shrunk.
I also wonder what the chart would look like if it accounted for total real compensation rather than real income (or the CBO’s rather peculiar definition of compensation).
And yet — I’m still in the (upper quintile of the) 99%, and if you boil things down to just their income and wealth numbers, the 1% is as far away from me as I am from a struggling working family with an onerous mortgage and a highly uncertain employment outlook. And there’s no need for them to shower themselves with that kind of money. From me on out, it’s pure avarice. Which is human, and natural, and probably even helps in terms of economic growth. But given the amount of misery and poverty in America, it’s simply unconscionable that I and the people earning vastly more than me — including all of the 1% — are getting such an enormous share of the income and wealth so desperately needed elsewhere.
All of which is to say that my taxes are too low. If my taxes went up and the money was used to reduce poverty and unemployment in America, my standard of living would still be glorious — and millions of lives would be improved. And as for the 1%, their taxes could double and they would still be fabulously well off. I’m not proposing that as a policy solution. But I am trying to put things in perspective here.
I wonder what his perspective would be if his taxes went up and, rather than using the money to reduce poverty or unemployment, the bulk of the money went to other people in the top income quintile or was handed over to key constituencies to ensure re-election for incumbents. That’s largely what happens when we increase spending on healthcare, education, firefighters and policemen, or bailing out banks and auto companies.
That’s my main gripe about fiscal policy these days. I see a lot of irresponsible, profligate, and unreliable stewardship. To my mind the solution for that is more responsible, less profligate, and more reliable stewardship rather than more funds to be irresponsible, profligate, and unreliable with. It may well be more funds are needed but it’s darned hard to trust the same scoundrels over and over again. New scoundrels aren’t much of a solution, either.
Meanwhile, I’m mulling over what a fair income is and how that can be accomplished. I think I’d agree that stacking the deck and using your wealth and power to accumulate more wealth and power is unfair. As I’ve written before I don’t think that particular sport is limited to the top 1% but is to a large degree why the top quintile is in the top quintile. Further, I think the more power and wealth is concentrated in a federal government that determines what a fair income is the worse that will become. Rent-seeking increases because it pays off.
I’m not sure I see any way outside of a Benedictine monastery with vows of poverty, chastity, silence, and obedience to accomplish real equality. That hasn’t caught on in 1500 years so it probably won’t catch on now. Are equality and fairness the same thing? I don’t think so.