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.

But has remained stubbornly persistent despite the "booming" economy.

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.

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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Man up.

I noticed that the article you posted is a year old since then saving in the form of home equity seems to be losing ground. No, I wouldn't advocate that policy. "Deserve" might have been a poor choice of words. I used it to suggest that wealth is not always the result of "ability and effort" as your initial post suggested. Lots of people have acquired it the old fashioned way- inheritance. In any case, I have no problem with wealth. My concern is with the stability of the country both politically and economicly. As the very wealthy become even wealthier they can buy more government supports and giveaways which helps them become more wealthy and on and on. Meanwhile, regular people are relying on record levels of consumer debt. Both the widening income gap and the levels of consumer debt are I.M.O. ominous signs. Have you heard about "fingers of instability", theory-why that last grain of sand triggers the sand pile to collapse? I am concerned that there are a number of fingers of instability in this economy, the growing income gap is one of them. For selfish reasons, I think that the "somewhat wealthy"(those who are not in a position to move wealth into other currencies etc.) should also be concerned. Quoting J. Mauldin; "Hyman Minsky points out that stability leads to instability. The longer a given trend persists, the more dramatic the correction when the trend fails. The problem with long-term macroeconomic stability is that it tends to propduce unstable financial arrangements. If we believe that next year will be the same as last year we are more willing to add debt and postpone savings. The longer the period of stability the higher the risk for even greater instability when market participants must change their behaviour. The more fingers of instability that are allowed to develop connections to other fingers of instability the greater potential for an avalanche".

I'm reading a lot of people getting lost in the statistics and a lot of people not being able to see the big picture. There are actually better statistics than that about this problem but, yes, it's true. The Middle Class in America is dying. One of the biggest reasons why there was a middle class is because outsourcing was unheard of. It was impossile to have instant information, poorer countries could never hope to be trained to fill these jobs, and most people only spoke one language. What's happening in America now which hey don't want you to know is companies are outsourcing every job they can while a lot of the middle-class jobs are being inflated and stolen by immigrants. Even college degrees don't guarantee people jobs anymore. Some people will try and convince people that the middle class has not dissappeared but moved up in income so the upper middle class is now the middle middle class. This is not true also. The Majority is the Middle Middle Class and Lower Middle Class. Upper middle class people are a far smaller group. Also, today even if someone gets a Master's degree or even a doctorate does not guarantee them to be in the Upper middle class income bracket. The truth is the standard of living is going down and the gap between the rich and poor is widening. This is why the rich are getting richer. It's not because of economic growth, that's for sure. If anything, the US has more competition than ever economically. The top guys are getting richer because they're paying less. And the poor guys are getting poorer because they increasingly have to settle for lower and lower income jobs; basically jobs that can't be outsourced. Look at retail stores. They build far more retail stores than anything today because you can't outsource it and everyone wants to sell their crap here. That's the way I see it and by now am pretty convinced of it.

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I'll never Forget. To pull You Closer is to Pull You Down. Ignorence can be an envy. Applaud us as the old American Power goes quietly into the night.

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.

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.

Their marginal rate is higher. You begin to lose many deductions at $85K.

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.

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All you need to know about the energy crisis:
ANWR Exploration Republicans: 91% Supported. Democrats: 86% Opposed.
Coal-to-liquid R's: 90% YES. D's: 78% NO.
Oil Shale Exploration R's: 90% YES. D's: 86% NO.
Outer Continental Shelf Exploration R's: 81% YES. D's: 83% NO.
Increased Refinery Capacity R's: 97% YES. D's: 96% NO

SUMMARY: 91% of House Republicans have historically voted to increase the production of America’s own oil and gas. 86% of House Democrats have historically voted against.

This trend is tied to a variety of factors. I think that the most important factor is the profit motive in the U.S. and increased practice of outsourcing. Companies are cutting costs by outsourcing non-core tasks or production to overseas facilities. The residual profit is distributed to shareholders and top managers and executives as incentives for increasing profit. There is a huge drive for pay for performance incentives in the U.S. This half of the equation helps managers increase shareholder value and contributes to higher income for the top 1%.

At the same time this decreases the number of middle income jobs available in the U.S. and lowers middle income wages because of lower demand for skills and a higher supply of unemployed workers. This decreases the size of the middle class as well. Imagine the disparity as this trend continues in the future.

Unfortunately this will enter the political arena in favor of liberals, understandably so. In a society in which the majority and vote/legislate itself entitlements (the government provide prosperity) by taxing the more fortunate, there will be a movement to decrease the income disparity by taxation and redistribution.

I think that the world economy is doing great. The U.S. economy is on a trail to depletion.

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"Democracy is a process by which the people are free to choose the man who will get the blame."

-Laurence J. Peter