*OT* Since you guys have been talking about taxation, here are a few stats I found a bit eye popping. Since these are 2005 figures, with the private equity boom over the past two years I'd guess the next set to come will be even more skewed toward the very rich. It seems that the top 3 million, which must include guys a lot lower than McNealy make as much as the bottom 166 million.... Some of these billionaires are getting away with highway robbery (IMO) paying 15% on their billion dollar paychecks... And to help things along, I've also included an article about how up to 20% of Americans will be using credit cards this winter in order to pay heating bills...
John
Report Says That the Rich Are Getting Richer Faster, Much Faster
By DAVID CAY JOHNSTON
Published: December 15, 2007
The increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceeded the total income of the poorest 20 percent of Americans, data in a new report by the Congressional Budget Office shows.
The poorest fifth of households had total income of $383.4 billion in 2005, while just the increase in income for the top 1 percent came to $524.8 billion, a figure 37 percent higher.
The total income of the top 1.1 million households was $1.8 trillion, or 18.1 percent of the total income of all Americans, up from 14.3 percent of all income in 2003. The total 2005 income of the three million individual Americans at the top was roughly equal to that of the bottom 166 million Americans, analysis of the report showed.
The report is the latest to document the growing concentration of income at the top, a trend that President Bush said last January had been under way for more than 25 years.
Earlier reports, based on tax returns, showed that in 2005 the top 10 percent, top 1 percent and fractions of the top 1 percent enjoyed their greatest share of income since 1928 and 1929.
The budget office report takes into account a broader definition of income than tax returns that is known as comprehensive income. It includes untaxed Social Security benefits, welfare, food stamps and part of the value of Medicare benefits, giving a fuller picture of incomes at the bottom than tax data.
Much of the increase at the top reflected the rebound of the stock market after its sharp drop in 2000, economists from across the political spectrum said. About half of the income going to the top 1 percent comes from investments and business.
In addition, Congress in 2003 cut taxes on long-term capital gains and most dividends, which advocates said would encourage people to turn untaxed wealth into taxable income. Some economists have said that the increase in incomes at the top is illusory and is in good part simply converting untaxed assets into taxed income to take advantage of reduced tax rates.
The Congressional Budget Office report made no attempt to explain the increases in income in its annual report on effective federal tax rates paid by people at different income levels.
Asked how much of the increase at the top was from the tax cuts rather than market gains, Peter R. Orszag, the budget office director, said, “I can’t give you an answer to that because we just don’t know.”
Chris Frenze, Republican staff director for the Congressional Joint Economic Committee, said the increase in top incomes is much more modest if viewed over longer time periods. Since 2000, he said, the average income of the top 1 percent has risen $97,900, or 6.7 percent, the same percentage increase this group had from 1992 to 1997.
Jared Bernstein, an economist at the Economic Policy Institute in Washington who characterizes the Bush administration’s policies as YOYO economics, based on You (Are) On Your Own, said the differences in income growth explained why so many Americans have told pollsters that they are feeling squeezed.
“A lot of people justifiably feel they are working harder and smarter, they are baking a bigger and better pie, and yet their slice is not growing much at all,” Mr. Bernstein said. “It is meaningless to middle- and low-income families to say we have a great economy because their economy looks so much different than folks at the top of the scale because this is an economy that is working, but not working for everyone.”
At every income level Americans had more income, after adjusting for inflation in 2005 than in 2003, but the increases ranged from almost imperceptible for the poor to modest for the middle class and largest for those at the top.
On average, incomes for the top 1 percent of households rose by $465,700 each, or 42.6 percent after adjusting for inflation. The incomes of the poorest fifth rose by $200, or 1.3 percent, and the middle fifth increased by $2,400 or 4.3 percent.
The share of all federal taxes paid by the top 1 percent grew, but only slightly more than half the rate of their growth in incomes because of the tax rate cuts. The top 1 percent paid 27.6 percent of all federal taxes in 2005, up from 22.9 percent in 2003, while the share paid by the middle fifth of taxpayers declined to 9.3 percent from 10 percent in 2003.
The share of their income that the top 1 percent paid in all federal taxes and in income taxes fell. The total tax rate dropped 1.8 percentage points, to 31.2 percent, from 2003 to 2005 while their average income tax rate declined one percentage point, to 19.4 percent, largely because of the cuts in taxes on capital gains and dividends.
One in Five Expect to Borrow to Heat Homes This Winter
by Connie Prater, CreditCards.com
Tuesday, December 18, 2007
provided by
For perhaps as many as 27 million American adults, keeping warm this winter will mean borrowing money and 20 million will use credit cards to be able to afford their heating bills, according to a CreditCards.com poll.
Nearly 12 percent of Americans say they will need to borrow money to pay winter heating bills; 9 percent will need to use credit cards to be able to afford their heating bills. The poll, commissioned by CreditCards.com and conducted by GfK Roper Public Affairs & Media, surveyed 1,004 randomly selected American adults by telephone Dec. 7-9, 2007 to gauge their attitudes about energy costs in 2008. A majority say they expect oil and gasoline prices to get worse in 2008.
Heating bills are rising at a time when utility companies across the country are broadening electronic payment options for customers, including allowing credit card payments for utility bills. Personal finance experts say paying for basic living expenses with credit cards makes sense only if you pay off the entire balance each month. They also warn that carrying a revolving balance encourages people to live beyond their means while racking up interest charges that can plunge families deeper into debt.
Conserving and cutting back
More than two-thirds of the poll respondents (71 percent) say they will attempt to reduce heating costs by lowering their thermostats this winter. Every American family will need to consider ways to make similar kinds of changes in their long-term energy consumption habits, says Perry Sioshansi, president of Menlo Energy Economics, a San Francisco energy consulting company.
"We all need to make those decisions when we buy appliances, when we're replacing appliances. When the light bulb goes out, buy the more efficient kind and put it in, get the more-energy-efficient insulation for the walls," he says. "These are permanent things that improve the utilization of energy."
He and other oil industry analysts and energy experts expect fuel costs to continue to rise in 2008 -- a situation that could contribute to an overall economic slowdown.
Winter outlook
According to the Energy Information Administration (EIA), the federal agency that collects and distributes data on energy use and expenditures, heating costs between October 2007 and March 2008 are expected to spike by nearly 10 percent for the average U.S. household. The winter fuel projections show the sharpest gains for heating oil users -- especially those living in the Northeast.
Special Report: Financial Outlook 2008
"That's where people are really going to get socked," says Neil Gamson, an EIA energy fuel price expert. "Almost all the heating oil in this country is consumed in the Northeast, in New England, the midAtlantic states of New York, New Jersey and Pennsylvania."
Residents of those areas could pay a total of $2,012 over the six winter months -- or an average of $353 a month -- to heat their homes through March 2008. That's a 34 percent increase over the previous winter's bills.
More than half the country uses natural gas for home heating. The highest heating bills will again go to the Northeast, where the average home can expect to pay a total of $1,202 over the winter months -- or about $200 a month. The Western states will have the lowest natural gas bills, according to the EIA. Homeowners there will pay about $557 through the winter.
Help paying the bills
Consumer credit counselors advise homeowners to consider all utility payment options before borrowing to pay the bills. This may include:
Federal, state and local government assistance programs that offer grants to low- and moderate-income families to defray heating bill costs.
Delayed or reduced payment plans offered by utility companies to help customers budget energy expenses, including averaging payments over the course of the entire year to avoid getting hit with a jaw-dropping winter bill.
Charitable programs sponsored by many utilities that solicit donations from paying customers to help consumers who are struggling to pay their bills.
Beware of easy credit options, warns Tom Feltner, policy and communications director at the Woodstock Institute, a Chicago-based economic development research group that specializes in consumer lending.
He notes the CreditCards.com poll data showing that nearly 20 percent of people making under $20,000 a year and 27 percent of those earning $20,000 to $30,000 annually believe they will have to borrow money to make the utility payments during the 2008 winter.
"This is exactly the type of situation where consumers have to be wary of their credit options," he says. "Don't rush into the easiest form of consumer credit. For many consumers, that's often payday loans."
Avoid expensive borrowing options
Convenience checks and cash advances offered by credit card companies carry higher interest rates. "Payday loans," offered by retail lending franchises across the country, are a source of quick cash for people who borrow against their next paychecks. Woodstock researchers have found payday loans can end up costing as much as 300 percent in interest and fees. "When it gets cold we always try to make it clear that payday loans are really one of the most-expensive forms of credit," Feltner says.
He adds: "Borrow from friends and family, dip into savings, look into credit unions for affordable loan products, negotiate a payment plan with your utility provider."
About the poll: GfK Roper Public Affairs & Media conducted interviews with 1,004 Americans over the age of 18 on Dec. 7-9, 2007. The survey participants were selected through random-digit dialing across the continental United States. The poll's margin of error at the 95 percent confidence level is plus or minus 3 percent for the full sample. |
