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Originally Posted by raytri";p="
Yes, except a tax increase enacted in 1993 wouldn't show up until 1994 at the earliest. That doesn't refute the larger trend, but it's interesting that the numbers shifted in favor of the lower fifths in 1995.
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Generally I would agree, it takes a year. I believe it was passed in April so that would be 8 months. But it is interesting that the trend was a slow one until that year. Out of 20 years we've had recessions, booms, tax cuts, etc. But the one big change is right after a tax increase, our only one during that period. It doesn't prove anything, but it sure makes you wonder.
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But has remained stubbornly persistent despite the "booming" economy.
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Much like there is no such thing as "full employment" I don't believe there is any such thing as "zero poverty." There will always be a segment of society that doesn't do what is necessary to raise out of poverty. No matter how much the economy booms, if you don't get a job, continually quit jobs, don't go to school, etc then your income will not rise. Owning a business has strengthened this belief. Seeing the same people who have jumped job to job their entire lives. They're poor for a reason and it isn't because they're working hard or doing all the right things.
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Why is taxing them at a higher *marginal* rate "punishing" them? I'm glad they're fabulously successful. But that second $100,000 should be taxed at a higher rate than everybody's first $100,000.
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Their marginal rate is higher. You begin to lose many deductions at $85K.
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I'll agree that those contribute. They may even be major contributors. But is your thesis is that the income gap is entirely attributable to the stock market and the service economy? You're going to argue that tax policy, educational policy, etc. has no significant effect?
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I don't know what the numbers are, the last time I saw figures was during the Clinton Presidency and they attributed more than half of the increase due to the stock market alone. I have no idea what the numbers are now, same with the changing economy. But I know they are significant contributors. Sure, tax and education plays a part (although small on the latter considering how much we spend on education and that it's been going up not down), but my opinion is that those items would be lesser factors than economic changes and the market combined.