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To: tejek who wrote (6009)	1/11/2012 10:52:44 PM
From: TimF	3 Recommendations Read Replies (1) \| Respond to of 7936

1979-2007: Rich Got Richer, Poor Got Richer WASHINGTON – "Today, the Employment Policies Institute (EPI) announced the publication of new research by economists Dr. Richard V. Burkhauser of Cornell University, Dr. Jeff Larrimore of the Joint Committee on Taxation and Dr. Kosali Simon of Indiana University, the results of which appear in the most recent issue of the Journal of Policy Analysis and Management (link fixed). In his recent speech on deficit reduction, President Obama defended his support of higher taxes on wealthy Americans by echoing a widely-held view that the rich are getting richer while the poor and middle class are falling behind. But Burkhauser et al. find that this popular notion is mistaken; in reality, growth in after-tax household income has been substantial across the entire income distribution over the last thirty years (see table above). “By leaving out additional sources of income – like fringe benefits or employer-provided health insurance – past studies have dramatically understated American households’ access to after-tax resources.” said Dr. Burkhauser. “What we found is that the rich did get richer over the last 30 years, but so did the middle class, the working class and the poorest.” By taking into account previously unmeasured shifts in household size and the tax units in them, the taxes and transfers of government, and the increasing importance of fringe benefits, the research shows a picture of growth that spans all income groups. Burkhauser continued: “For instance, the conventional wisdom holds that the poorest households saw their income shrink by a third over the last three decades. But accounting for income transfers and the value of fringe benefits, this research shows that the bottom 20 percent of households actually experienced after-tax income growth of more than 26 percent.” Burkhauser concluded: “This isn’t a zero sum game, where one group wins at the expense of others. The growth in productivity of Americans in the top twenty percent of tax units increased the size of the economic pie sufficiently to register major gains across the entire distribution of after-tax income.” mjperry.blogspot.com Increasing inequality in the distribution of earnings has become one of those stylized facts that everyone “knows.” The nightly news reminds viewers that ordinary workers have not fared well in the labor market over the last 25 years, while corporate executives have. Many professional economists and a recent CBO report have supported this view as well. While it is true that the cash explicitly paid to employees has become more unequal over the last generation, the…more benign explanation for the change in cash compensation over a generation is the dramatic increase in health insurance costs. …inequality in total compensation has not increased because the fixed costs of health insurance are a much larger percentage of the total compensation of lower-earnings workers. Burkhauser and Simon explore this explanation. They add the value of employer-provided health insurance as well as Medicaid and Medicare to the pre-tax, post-cash-transfer household income data and find that the bottom three income deciles actually exhibit higher growth than the top seven deciles from 1995 to 2008. …Warshawsky makes a similar discovery. Using unpublished BLS total compensation data, including employer health insurance expenditures, from 1999 to 2006, he finds that the growth in compensation by earnings decile (from the 30th to the 99th) averages 35 percent, with 41 percent growth at the 30th percentile (workers earning $10–$14 an hour) and only 35.8 percent growth at the 99th percentile (workers earning $59–$80 an hour). cato.org Translating all this into simple English, it turns out that the rich are getting richer slower than the rest of us are getting richer. danieljmitchell.wordpress.com Adjusting for inflation, the Census Bureau measure of median household income increased by 10% between 1973-2008. This is a broader and in my view better measure of income than BLS wages. Contrary to popular perception, aggregate hours worked per adult are no higher than in 1973. Furthermore, this comparison does not take into account changing demographics. Compared to 1973, America has taken in millions of unskilled Hispanic workers, who earn less and depress the median. If we look at non-Hispanic white households, real median income increased by 15%. For African Americans, real median household income increased by 22%. super-economy.blogspot.com ...If we really want to know what happened to the poor of 1979, we need to be able to track specific households through time. Fortunately, we can. According to researchers at the University of Michigan, households in the bottom fifth in 1975 earned an average of almost $28,000 more per year by 1991, adjusted for inflation. According to U.S. Treasury data, a whopping 86 percent of households in the bottom fifth in 1979 had climbed out of poverty by 1988... (And that's not considering that households have gotten smaller - Tim) philly.com "...Incomes for the poorest one-fifth of all earners have grown on average 3.9% a year since 1994. Meanwhile, those in the middle three-fifths of incomes — broadly speaking, the middle class — have grown by 3.4% to 3.6% a year..." ibdeditorials.com "...After one year, about one-third of workers in the bottom income quintile move to a higher one; about one-quarter of those in the top quintile move to a lower one. Only 29 percent of workers remain in the same income quintile after 15 years. On average, individuals can expect to move from the 20 th percentile of the earnings distribution at the beginning of their career to about the 60 th percentile during their peak earning years. Less than one third (31 percent) of children are in the same income quintile as their parents..." taxesandgrowth.ncpa.org Also see - Are the poor getting poorer? youtube.com (3:27)

To: tejek who wrote (6009)	1/11/2012 10:54:06 PM
From: TimF	2 Recommendations Read Replies (1) \| Respond to of 7936

The Rich Are Getting Richer and the Poor Are Getting Richer By Mark J. Perry December 1, 2009, 6:32 am The U.S. Census Bureau recently released a study on the “Living Conditions in the United States, 2005” with detailed information on the “ Percent of Households Reporting Consumer Durables,” and those percentages are displayed in the table below for: a) all U.S. households in 2005, b) households with income below the official poverty line in 2005, and c) all households in 1971. Not surprisingly, the percentage of U.S. households owning basic home appliances increased between 1971 and 2005 for all appliances except traditional telephones, which have gradually been replaced by cell phones. Certain appliances such as air conditioning, clothes dryers, color TVs, and dishwashers that used to be luxury items owned by a minority of American households in 1971 became so affordable that by 2005 a large majority of households owned all of those appliances. And some household items such as microwave ovens, VCRs, computers, and cell phones that were virtually nonexistent in 1971 became so affordable by 2005 that more than two of every three American households owned those items. But what is even more impressive is the comparison of the living standards of households living below the poverty line in 2005 to all U.S. households in 1971. By almost every measure of appliance ownership, poor American households in 2005 had much better living conditions than the average American household in 1971, since poor households in 2005 had much higher ownership rates for basic appliances like clothes dryers, dishwashers, color TVs, and air conditioners than all households did in 1971. As economist Steve Horwitz commented recently about these improvements on the Austrian Economists blog, “Life for the average American is better today than 35 years ago, life for poor Americans is much better than it was 35 years ago, and poor Americans today largely live better than the average American did 35 years ago. Hard to square with a narrative of economic stagnation or decline.” The reasons for the significant improvements in living standards over time for Americans at all income levels? Entrepreneurial innovation, technology improvements, supply-chain efficiencies, increases in productivity, and other market-based efficiencies that have continually driven prices lower and lower over time, measured in what is most important: our time and the amount of labor it takes to earn the money to purchase goods and services. The chart below shows retail prices for 11 different household appliances in both 1973 ( data here) and 2009 ( data here), and the cost of purchasing those appliances measured by the number of “hours of work” at the average hourly wage in each year ( BLS data here: $4.12 per hour in 1973 vs. $18.72 per hour in 2009). The chart shows the significant reductions in the real cost of basic household appliances between 1973 and today of from -50.7 percent for a basic kitchen stove (70.4 hours of work at the average wage in 1973 vs. 34.7 hours in 2009) to -83.5 percent for color TVs (97.1 hours in 1973 vs. 16 hours in 2009). In total, to purchase all of those 11 basic household appliances in 1973, it would have taken 551.1 hours of work (13.8 weeks or 3.4 months) at the average hourly wage. To purchase those same 11 appliances in 2009, it would have only taken 171 hours of work (4.3 weeks or 1.1 month), a whopping 69 percent reduction in the number of hours worked. Or the typical worker in 1973 would have had to work from January 1 until the second week of April to earn enough income to purchase those 11 appliances (ignoring taxes), whereas a worker today would only have to work from January 1 until the first few days of February to earn enough income for those same appliances. Bottom Line: As much as we hear reports about the decline in median income, economic stagnation, the disappearance of the middle class, and falling real wages, the data tell a much different story that can be summarized as follows: The rich in America are getting richer and the poor are getting richer. blog.american.com

To: tejek who wrote (6009)	3/27/2012 7:54:16 PM
From: TimF	Read Replies (1) \| Respond to of 7936

Why the health care reform law is unconstitutional By Ilya Somin, Special to CNN Editor's note: Ilya Somin is an associate professor of law at George Mason University School of Law and co-editor of the Supreme Court Economic Review. He has written an amicus brief in the individual mandate case on behalf of the Washington Legal Foundation and a group of constitutional law scholars urging the court to strike down the law. He blogs regularly at the Volokh Conspiracy law and politics blog. (CNN) -- This week, the U.S. Supreme Court considers the case challenging the Obama administration health care plan's requirement that most Americans purchase a government-approved health insurance plan by 2014. The court should rule that this individual mandate is unconstitutional. To do otherwise would give Congress almost unlimited power. The federal government argues that three provisions of the Constitution -- the commerce clause, the tax clause and the "necessary and proper" clause -- authorize the health care mandate. The commerce clause gives Congress authority to regulate interstate commerce. Since the 1930s, Supreme Court decisions have interpreted the commerce clause broadly. But every previous case expanding the commerce power involved some sort of "economic activity," such as operating a business or consuming a product. Failure to purchase health insurance is neither commerce nor an interstate activity. Indeed, it is the absence of commerce. If Congress could use that clause to regulate mere failure to buy a product on the grounds that such inaction has an economic effect, there would be no structural limits to its power. Any decision to do anything is necessarily a decision not to do something else that might have an economic effect. If I spend an hour sleeping, I thereby choose not to spend it working or shopping. As the lower court decision in this case explained, the government's position "amounts to an argument that the mere fact of an individual's existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life." Defenders of the insurance mandate claim that health care is a special case because everyone eventually uses it. But this argument relies on shifting the focus from health insurance to health care. A similar rhetorical ploy can justify any other mandate, including even the "broccoli purchase mandate." Not everyone eats broccoli. But everyone participates in the market for food. Similarly, a mandate requiring all Americans to purchase a car can be justified because virtually everyone participates in the transportation market. The government also claims that health care is different because producers are sometimes required to give free emergency services to the uninsured. But why is this fact constitutionally relevant? The answer seems to be that failure to buy insurance thereby has adverse economic effects on producers. Put that way, failure to buy health insurance turns out to be no different from failure to buy any other product. Any time someone fails to purchase any product, producer profits are lower than they would be otherwise. The government's tax-clause argument is similarly flawed. It asserts that the individual mandate isn't really a restriction on freedom, it's just a tax; violators are forced to pay a fine. If this logic is correct, it would justify any mandate enforced by a monetary fine, whether it be for broccoli, a car or anything else. Every lower court to have considered this constitutional issue has ruled that the mandate is not a tax but a penalty. As President Barack Obama acknowledged in 2009, "for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase." Finally, the government relies on the clause that gives Congress the power to "make all Laws which shall be necessary and proper for carrying into Execution" other powers the Constitution grants it. The federal government argues that the insurance mandate is a "necessary" element of its regulation of the health care market under the commerce clause. The court has previously defined "necessary" broadly as anything that might be "useful" or "convenient." But even if the mandate is necessary, it is not "proper." The court has previously ruled that these are two separate requirements and both must be met. What makes a federal law "proper"? At the very least, a proper law cannot depend on a rationale that gives Congress virtually unlimited power. As James Madison said: "Whatever meaning this clause may have, none can be admitted that would give an unlimited discretion to Congress." If the "necessary and proper" clause allows Congress to adopt the individual mandate, the same logic would justify almost any other mandate. Virtually every mandate has some economic effect and could be portrayed as a "useful or convenient" way to regulate some market. A broccoli mandate could be defended as an effort to regulate the market in food. The threat to liberty raised by this case isn't just theoretical. Many industries would be happy to lobby for laws requiring people to buy their products, and Congress has a long history of enacting special-interest legislation. In a recent decision, the Supreme Court unanimously emphasized that constitutional constraints on federal power protect state rights as well as "the liberty of the individual." Little will be left of that protection if the justices uphold the individual mandate. edition.cnn.com