Posted on 11/27/2007 8:12:32 AM PST by jazusamo
Tuesday, November 27, 2007
People who are in the top one percent in income receive far more than one percent of the attention in the media. Even aside from miscellaneous celebrity bimbos, the top one percent attract all sorts of hand-wringing and finger-pointing.
A recent column by Anna Quindlen in Newsweek (or is that Newsweak?) laments that "the share of the nation's income going to the top 1 percent is at its highest level since 1928."
Who are those top one percent? For those who would like to join them, the question is: How can you do that?
The second question is easy to answer. Virtually anyone who owns a home in San Francisco, no matter how modest that person's income may be, can join the top one percent instantly just by selling their house.
But that's only good for one year, you may say. What if they don't have another house to sell next year?
Well, they won't be in the top one percent again next year, will they? But that's not unusual.
Americans in the top one percent, like Americans in most income brackets, are not there permanently, despite being talked about and written about as if they are an enduring "class" -- especially by those who have overdosed on the magic formula of "race, class and gender," which has replaced thought in many intellectual circles.
At the highest income levels, people are especially likely to be transient at that level. Recent data from the Internal Revenue Service show that more than half the people who were in the top one percent in 1996 were no longer there in 2005.
Among the top one-hundredth of one percent, three-quarters of them were no longer there at the end of the decade.
These are not permanent classes but mostly people at current income levels reached by spikes in income that don't last.
These income spikes can occur for all sorts of reasons. In addition to selling homes in inflated housing markets like San Francisco, people can get sudden increases in income from inheritances, or from a gamble that pays off, whether in the stock market, the real estate market, or Las Vegas.
Some people's income in a particular year may be several times what it has ever been before or will ever be again.
Among corporate CEOs, those who cash in stock options that they have accumulated over the years get a big spike in income the year that they cash them in. This lets critics quote inflated incomes of the top-paid CEOs for that year. Some of these incomes are almost as large as those of big-time entertainers -- who are never accused of "greed," by the way.
Just as there may be spikes in income in a given year, so there are troughs in income, which can be just as misleading in the hands of those who are ready to grab a statistic and run with it.
Many people who are genuinely affluent, or even rich, can have business losses or an off year in their profession, so that their income in a given year may be very low, or even negative, without their being poor in any meaningful sense.
This may help explain such things as hundreds of thousands of people with incomes below $20,000 a year living in homes that cost $300,000 and up. Many low-income people also have swimming pools or other luxuries that they could not afford if their incomes were permanently at their current level.
There is no reason for people to give up such luxuries because of a bad year, when they have been making a lot more money in previous years and can expect to be making a lot more money in future years.
Most Americans in the top fifth, the bottom fifth, or any of the fifths in between, do not stay there for a whole decade, much less for life. And most certainly do not remain permanently in the top one percent or the top one-hundredth of one percent.
Most income statistics do not follow given individuals from year to year, the way Internal Revenue statistics do. But those other statistics can create the misleading illusion that they do by comparing income brackets from year to year, even though people are moving in and out of those brackets all the time.
That especially includes the top one percent, who have become the focus of so much angst and so much rhetoric.
Thomas Sowell is a senior fellow at the Hoover Institute and author of Basic Economics: A Citizen's Guide to the Economy.
bookmark
FWIW, I’d give a rough estimate that at least 80% of the “top one percent” are Democrats. Almost all the rich people I know these days are liberals. And recent surveys seem to confirm that anecdotal experience.
Another interesting thing I read on this same principle. Obama mentioned that only 6% of the people earmn more than $97,500 so the threshold should be increased. The fact is that over 20% of the workers will exceed this level at some point so it is a broader tax than he realizes. In a liberal world people stay in minimum wage jobs their entire life and income levels can never be altered.
Sorry - referring to the Social Security tax.
Try "Newspeak". The other one is "Slime Magazine".
All correct, I had to chuckle when I read that. lol
Just as there may be spikes in income in a given year, so there are troughs in income, which can be just as misleading in the hands of those who are ready to grab a statistic and run with it.
Many people who are genuinely affluent, or even rich, can have business losses or an off year in their profession, so that their income in a given year may be very low, or even negative, without their being poor in any meaningful sense.
When Sowell says something, it is excruciatingly clear.Anyone who suckers for the con that " individual people are ineluctably consigned to particular "quintiles of income should be embarrassed.
I’d give a rough estimate that at least 80% of the “top one percent” are Democrats. Almost all the rich people I know these days are liberals. And recent surveys seem to confirm that anecdotal experience.
Democrats sell themselves as "the party of the little guy" and portray Republicans as "the party of the rich." But it is the Democratic Party which is disproportionately dependent on larger contributions, and it is the Democratic Party which carries the majority vote not only in the "inner city" but in the toney inner suburbs.In reality the Republican Party is the party of the middle class.
Most of the top 1 percent are people like my parents. Worked hard all of their life, had ups and downs, built a small business from scratch, made some prudent real estate purchases along the way. However, like many small business owners, they are not very liquid. They don’t take expensive trips often, or own fancy cars. They also employ 25 people.
I agree...For the most part the top one percent are people that have worked hard for it and don’t throw it around.
Dr. Sowell is truly a national treasure!
My guess is that people who make up to a couple hundred thousand per year would still be republicans. These are the small business owners who have to work hard to reach that level. Once you hit the super rich, 10 million plus, then you start to see them become leftists.
Exactly. With some exceptions, of course.
Booked
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