The Frightening Picture of U.S. Income Inequality

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There's a growing wealth divide between the richest Americans and the rest of us. Just how much of a disparity might surprise you.

This YouTube video, posted by site user politizane and based on data from a Mother Jones post, shows the startling breakdown. We think you'll be shocked at just how much of the nation's wealth is held by the top 1%, and how little the bottom 80% actually have.

Watch the video to find out just how much the real picture of U.S. income inequality differs from the ideal disparity Americans would like to have.

Join the conversation. Click here to jump to comments…

  1. Col (R) Larry D Beaver | March 8, 2013

    Not you guys too!!! Yes, this is an incredible video with some rather shocking information. But, don't let this sway your opinion of the value of capitalism and hard work. This guy, "guardian", is measuring the wrong metric to determine equitability in the economy. I am speaking of taxes. Who puts up the dough to make all this work. Well, according to the National Taxpayers Union data, in 2009 the top 1% of income earners paid 36% of the total personal income tax paid. The bottom 50% of American wage earners (those below $32,000 annually) paid 2.5% of the total personal income tax paid. So, instead of focusing on who owns what, we should be focusing on who is bearing the burden of our entitlement society.

    • Walter Baltzley | March 8, 2013

      I would like to see an animation of how these numbers have changed over the past 100 years…then I would like to see a second animation showing how political spending (campaign contributions, lobbying, etc) has changed…

      This is not the product of capitalism…it is the product of CORRUPTION…the "Collusion of Capital" that ADAM SMITH warned about in Wealth of Nations.

    • John Galt | March 9, 2013

      So by your own math, it's skewed, 36% of the taxes on 40% of the earnings.

      You are correct that many of the poor pay no taxes. It's also true they receive no benefit from or use for government spending on; Air Traffic control, TSA, airport infrastructure, foreign embassies, the SEC, chamber(s) of commerce, wars in the middle east, etc,etc…….. All of which are used and needed by the 1%ers. It's about time the rich started to pay their own fare.

    • Brice Coustillas | April 16, 2013

      No, Sir,

      For the share of taxes paid by the 1 percent is just an investment bearing huge returns: maintaining armed forces whose sole and only purpose is to secure raw materials supplies and support friendly regimes for American big business more than offsets their contribution.

      Additionally, what if — and it so occurred — an gigantic bankrupted-to-be automotive industry got rescued with Federal monies that eventually benefit stockholders? And what if —and it so occurred— a US president, to secure the votes of steel producing states (thus, steel producers), blocked steel imports from foreign countries and then paid, again with Federal monies, for the mamoth fine inflicted to the US by the World Trade Organization?

      You cannot be serious, are you?

    • site | June 26, 2013

      I like reading an article that will make people think.

      Also, many thanks for permitting me to comment!

  2. Peter Brinkmann | March 8, 2013

    Dear Colonel – Taxes pay for our government. The government spreads itself all over the world in many different forms, including our military, our State Department, Chambers of Commerce, etc. We are told that we need this government infrastructure in order to ensure the free flow of goods and services.

    This infrastructure has to be paid for. Who should pay for it if not those who derive the greatest benefit from this infrastructure? If those who are paying the highest amount in taxes do not agree that this infrastructure is necessary then quit lobbying our government to keep it in place. No poor people are contributing to the campaigns of politicians who have erected this vast superstructure. The top 1 per cent should be paying even MORE than they pay since we have such yawning deficits. Think of it like a branch office that has to pay for the corporate overhead of the home office. The more services you use and take from the home office the more you pay in corporate overhead. It's only logical and business-like.

  3. dourdan | March 8, 2013

    FDR

    • War2 | March 8, 2013

      Where do you get your data? Statistics can prove anything you want, if you manipulate the data.

      • Walter Baltzley | March 8, 2013

        US Tax Records and Census Data…we looked at this situation in all my business classes. Corruption has become a corporate strategy…with actual Return on Investment calculations. You can expect political spending to pay dividends of 30% or more in government contracts and tax breaks. You can expect returns of more than 100% on kickbacks to auditors and regulators…

        The biggest "investor" in government corruption in the past 30 years has been the BANKING industry…and guess who dominates the Fortune 100 and has the highest profit margins? Corruption is BIG business.

      • Tom C | March 9, 2013

        The best way I've seen that sentiment expressed is: "Statistics will confess to anything if you torture them long enough."

  4. Andy Schuck | March 8, 2013

    Sorry Peter but millions of poor people get way more benifit from from the infrastructure than the few that pay all the taxes, especially when 47% of citizens pay NO income taxes whatsoever. And the payroll "TAX" is really the money that goes into their SS account and that is how their "so called entitlement" is calculated.

    Tax the top 5 or 10% even more and they will take off, just watch what millionaires are doing in FRANCE and then who the heck will pay the taxes then…..the poor?

    • 48ozhalfgallons | March 8, 2013

      So where are all these millionaires relocating to spread their wealth? Pleas tell me!

      • Tony | March 9, 2013

        Where are they going??

        Well, lessee

        Panama
        Belize
        Costa Rica
        Isle of Man
        St. Kitz
        Italy
        Singapore
        Thailand
        Hong Kong

        I left Calif because of the taxes; I'm now planning to leave the U.S. Few foreign countries tax you on your off shore earnings.

        tony

  5. Ted | March 8, 2013

    Graphically well done and based on our research probably reasonably accurate. It seems this should have a complimentary component reflecting an intelligent discussion or why such distributions of wealth and income occur in America.

    Ironically, they only give numbers without even a marginal understanding of why this is happening or what effective solutions could be….. so I have to assume it was done by someone fundamentally uninitiated in both economics and human psychology or even the historically devastating impact of America’s social welfare system on wealth distribution. It strikes of a ‘redistributionist’s’ agenda soliciting an emotional response rather than probing intellectually for an understanding of wealth creation.

    Of course, historically, from a pragmatic standpoint it has always been easier to blame successful people for the poverty of the entitled than it is to create personal accountability and financial discipline among those who would most benefit from it. A much more beneficial presentation would include a study of what we must do to elevate ourselves from bottom half of the economic demographic into the top quarter…… That process, incidentally, although it is no secret, has fewer subscribers because it requires self discipline, sacrifice, hard work, education, self reliance, and at least some modicum of financial competence. All elements fundamentally scarcer in a society where it is increasing easier to become socially and economically entitled than it is to become successful.

  6. Vaskosmopolita | March 8, 2013

    Well,I certainly desagree with that economical model that allows that so little people,hold so much money.It´s really embarrassing to see that while some CEOs benefy themselves thanks to the "out of control" American greed corporation´s culture,there are tecnicly millions of paupers all around the country.If state of things keep that way,that means things on this world are terribly wrong!!!.By the way,GOD WHERE ARE YOU????.

  7. Dave | March 9, 2013

    So! what do you expect? What is your solution? Buffet is worth mega billions and he earned it with out anyone or government distributing wealth to him. Bill Gates did the same, Larry Elisson as well. What a great country offering opportunity to anyone. These people think smarter and more strategicaly by a factor of 380x the average person. Do you suppose these ultra rich threw their money away on the Mega-Ball Lotto, buying cartons of cigarettes, playting video games, drinking or sitting around "supposed" friends complaining how unfair capitalism is? Not a chance! They educated themselves and decided to save their pennies and invest in an idea. This is available to anyone. I personally beleive a solid and God loving family foundation is they key to real happiness.

    You want fair, then quit over taxing the middle class. Liberals are especially STUPID.

  8. Eugene Patrick Devany | March 9, 2013

    I sponsor the non-commercial website TaxNetWealth.com. There is a graph which illustrates both the distribution and the change in net wealth between 1995 and 2010 at http://www.taxnetwealth.com/01_The_Wealth_Gap.aspx. The video above is wonderful but it does not show how the tax code with its $1.2 trillion in annual tax expenditures caused a redistribution of wealth to the top 10% over the 15 year timeframe. The next 40% of the population (the middle and upper middle class) lost 8% of their net wealth. The poorer 50% of the population (the poor and lower middle class) lost a devastating 70% of their net wealth (going from a 3.6% share down to 1.1% in just 15 years).
    I oppose a "soak the rich" wealth tax on top of progressive income tax rates but I support a revenue neutral 2% net wealth tax (excluding $15,000 cash and $500,000 in retirement funds). This net wealth tax would produce about 40% of federal revenue – enough to eliminate the job killing payroll taxes and provide a sound tax base for Social Security and Medicare benefits. The revenue would also enable the individual income tax to be reduced to a flat 8% (because the $1.2 trillion in annual tax expenditures are not needed with very low tax rates). The combined tax liability would be progressive even though rich and poor would pay the exactly same 2% (net wealth) and 8% (income) tax rates because the top 10% have about 75% of the net wealth.
    The capital gains, estate and gift taxes tend to be wealth tax substitutes and would not be needed if all assets were taxed the same. Taxing all assets and maintaining the U.S. worldwide tax jurisdiction also makes tax avoidance difficult. Best of all, a net wealth tax has a negative reinforcement effect on investment (as in "use it or lose it"). The combination of the low income tax rate with the elimination of the capital gains tax actually accelerates business trade and investment. The elimination of the 15.3% tax on labor encourages consumer spending, full domestic employment and increased profits.
    A 4% VAT would complete what is known as the 2-4-8 Tax Blend and enable the corporate income tax to be reduced to 8%. Every other developed country in the world uses a VAT to reduce corporate taxes. The low corporate income tax rate would also result in trillions of dollars in foreign corporate profits being repatriated to the U.S.
    Eugene Patrick Devany, JD, MPA

  9. David Still | March 9, 2013

    We pay our people work at a minimum wage of less than 10 dollars an hour. Any hour of work
    should be much higher. We let our companies pay millions of Americans at far less than a livable wadge and then we put them on food stamps. Some one to pay so we let our govmt. pay so we can take away their pride and subsidize them with social programs…..and then all bitch about why the can't make it. Someone is making all the money, it sure isn't our people.

  10. Tony | March 9, 2013

    Just curiously, if you took more away from those that earned it and gave it to the parasitic leeches, what would they do with it besides more of what they are doing now?

    Would they build a factory or buy drugs? Would they buy a farm and just buy higher quality steaks? Would they, as they did with the money in New Orleans, buy lap dances and $200 bottles of champaign or use it to learn a trade? Would they buy a house, take pride in it and maintain it, or would they use it to buy an x-box, ipad, gameboy and other toys? Would they use it to go to school or use it to buy a fancy car? Would they invest it to develop an income stream or take a cruise? Would they invest in some sort of education or just have more bastard kids for us to support? Would they be grateful or would they just think we are the suckers we are and demand MORE?

    Step right up and tell me HOW they would use the money if we gave them more? We've given them more than SIX TRILLION DOLLARS so far in the war of poverty and all we have purchased is more poverty. You want to give them MORE so we can have MORE poverty? You want to deprive ME of a cruise which I earned so you can give THEM a cruise which they did NOT earn.

    Or maybe you want to give it to the government to "build infra-structure". Didn't we try that a few years ago. THEY just squandered it on goverment employees. NOW they want more. I guess the government employees need more than the trillion bucks they already got. Oh, sorry, they need another "stimulus" to build roads and bridges–like last time. The government employees are only earning about twice as much as their private sector counterparts.

    Take a look around and see what your philosophy has spawned–are you happy with it? You want more of THIS? A drug/gang culture; 70% out of wedlock births; 80% of New York community college students cannot read; 50% high school drop out rate; 60% labor participation rate; 60% of teens with STDs; 50 million on food stamps; and EVERYBODY with an Obamaphone. You want more of THAT?

    You know, I believe you DO.

    tony

  11. Vidit | May 8, 2013

    Income and wealth are NOT interchangeable terms. Any more than deficit and debt. Stop mixing them – title says income, text use wealth………………….

  12. manna | May 13, 2013

    income

  13. Jamie | June 4, 2013

    Constantly amazed by the attitude that poor people are 'undeserving'. This attitude totally fails to consider the massive range of factors, mostly totally out of individuals' control, that lead to (and maintain) poverty. It is an insipid vicious attitude that drives a demonising of the poor and justifies the self-satisfaction of the rich. It pre-supposes that there are an infinite range of opportunities for poor people to better themselves if only they 'tried harder'. It is naively of the highest order and I personally feel slightly disgusted that people are so ready to judge people less fortunate than themselves.

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