Home > upward income redistribution > In the US since 1949 inequality has increased with each expansion, with most gains going to the 1% (2 charts)

In the US since 1949 inequality has increased with each expansion, with most gains going to the 1% (2 charts)

from David Ruccio



That’s right: during the first three years of the current “recovery,” the top 10 percent captured 116 percent of all income gains. That’s because incomes actually fell for the bottom 90 percent, even as they rose nicely for those at the top.

1 percent gains

Even more striking is the fact that 95 percent of the income gains during the same period went to the top 1 percent, with only 5 percent left for everyone else.

In other words, the fruits of the current expansion have been captured almost exclusively by those at the very top—in contrast to every other period of economic recovery in the postwar period.

We have to face the fact that capitalism’s crises have become increasingly severe, and the solutions to those crises have increasingly involved redirecting the income gains to a tiny minority at the top. Everyone else is being left behind. Is it any wonder that the current economic system is facing a legitimation crisis?

  1. September 29, 2014 at 6:12 pm

    Reblogged this on Taking Sides and commented:
    Or, in other words, the ‘system’ works exactly as it was ever intended if not exactly as advertised by its apologists and ideologues. “Legitimation crisis?” Or “the sound that the penny makes when it finally drops?”that ‘capitalism,’ properly managed,

  2. Macrocompassion
    September 30, 2014 at 5:22 pm

    Inequality in income is not sufficiently precise a definition of what needs to be corrected. Not everyone can be expected to have equal education (capacity), skills, strength, intelligence, etc., so our basic earning power is most likely to vary to a degree. Consequently by thinking in terms of income, the reader is inclined to take a socialist (or even communist) attitude to this unfair situation. Thus the picture presented in the article is misleading.

    The inequality that must be considered is unequal opportunity to earn. Although education etc play a part, the most effective limitation in this inequality is a lack of equal rights of opportunity for access to similarly valued sites, where work can be performed. This is not only farming land, the sites in town are thousands of times more productive and valuable, so it is here where the most good can be done.

    By speculating in land values, the cost of land is increased because the speculators hold out of use sites where development is or should be taking place. Land value speculation can be stopped by taxing it and this incentive (to cause more land to become available) will allow unused land to be used when it is above the margin for earning power (gain). The effect would be huge if this were done and certain countries who do tax land values gain from it over the rest of us who don’t. Below are listed the chief aspects for LVT. Its not all roses, but the numbers of selfish land owners is so small compared to the rest of the population that the negative aspects included below should be weighed fairly against the benefits.

    14 ASPECTS of LAND-VALUE TAXATION affecting Government, Land Owners, Community and Ethics

    3 aspects for GOVERNMENT

    1. Most of the ground-rent being collected as LVT, adds to the national income. It allows the other taxes on earnings, purchases and family/corporate ownership of buildings to be reduced and eventually to be eliminated.

    2. The ownership of each land parcel is registered. Then the cost of collecting the LVT is much smaller than for income tax and other production-related taxes. Using regularly updated maps, the rental value of each site (as if without buildings) is public knowledge. Then the LVT is simple to understand, the amount of tax is easily found and its payment by the land owner is impossible to avoid.

    3. With LVT, the national economy stabilizes and no longer experiences the 18 year housing boom and bust cycle, which was due to the changing prices that arose from speculation in land-values during town expansion.

    6 aspects affecting LAND OWNERS

    4. LVT is progressive, the owners of the most potentially productive sites pay the most tax. None is paid on marginally productive sites, since their owners cannot claim ground-rent from possible tenants.

    5. The land owner pays his LVT regardless of how the land is used. When the land is leased to tenants most or all of the resulting ground-rent is the tax.

    6. LVT stops the speculation in land prices because any withholding of land from proper use is too costly.

    7. The introduction of LVT reduces the sales price of sites even though their value (or potential usefullness) may continue to grow.

    8. With LVT, land owners are unable to pass the tax on to their tenant renters, due to the competition for land use. The users of (untaxed) marginal sites price their produce according to the costs of their labour, the use of the durable capital and the added transport needs. Owners/occupiers who access more productive land pay LVT/ground-rent and compete in their production, so this tax cannot be added to what buyers willingly pay.

    9. With the introduction of LVT, land prices will drop. Speculators in land values will tend to foreclose on their mortgages and to withdraw their money for reinvestment. Depending on the rate of these changes, bankrupcies can result. Then LVT should be introduced gradually to allow the investors sufficient time to transfer money to company-shares in durable capital goods, where their greater use will meet the increased demand for produce (see below).

    3 aspects regarding our COMMUNITY

    10. With LVT, there is an incentive to use land for production, rather than it laying idle or being partly used. An optimum amount of urban land is brought into use, which reduces the spread of suburbs onto rural land and avoids vacant city centers.

    11. With LVT, greater working opportunities exist due to cheaper land and a greater number of available sites. Consumer goods become cheaper because entrepreneurs have less difficulty in starting-up and running their businesses. Demand grows, unemployment decreases and with it a reduction in the polarization of our class-society and its degree of poverty.

    12. As LVT is introduced, investment money is withdrawn from land and placed in durable capital goods. The investors in company shares tend to be wage-earners (as well as banks and monopolists). Their decisions favour more competition and cheaper local production without heavy transport costs, whilst the monopolists have less control of prices and the unavailability of alternative goods. This is a natural trend of our free-marketing social system.

    2 aspects about ETHICS

    13. The collection of taxes directly from productive effort and commerce is socially unjust. The associated philosophy favours coercive robbery and is “Robin Hood” in style. LVT replaces this form of extortion by gathering the surplus rental income which comes without exertion. Consequently LVT is a natural system of money-gathering, which avoids the present-day distortion of business economics.

    14. Bribery and corruption cease with LVT. Before, this was due to the leaking of news of municipal plans for housing development. However, the speculation in land values is no longer worthwhile after LVT is in place.


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