Talk:Income inequality in the United States/Archive 2

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ITEP tax incidence graph is contradicted by reliable sources and needs to be removed.

This graph is sourced to a partisan lobbying group called Citizens for Tax Justice (ITEP is the group's "think tank" arm). It purports to show that the top 1% pay a lower total tax rate than the preceding 19%, but it has no corroboration and its internal federal component is dramatically contradicted by the federal effective rates given by the Tax Policy Center and Congressional Budget Office.

Effective Federal Tax Rate for the Top 1% in 2011

TPC - 30.4%

CTJ - 21.1%

That's a huge difference that persists over time, and isn't a one year fluke. Here's a CBO breakdown over time that consistently shows the top 1%'s effective federal income tax rate to be around 30%. The Tax Policy Center is also a liberal leaning group, a joint creation of the Urban Institute and Brookings Institute, but it's prominent, widely cited, and its hard incidence numbers are generally respected across political lines. The CBO is obviously also much more prominent and widely cited than the CTJ is. That the TPC and CBO independently derive figures that closely track each other time reinforces their credibility as reliable sources. The Tax Foundation, the conservative equivalent of the TPC, is a long established, respected, widely cited think tank that has directly criticized CTJ/ITEP's methodology in producing the reports used as the graph source. CTJ is the outlier here, and also happens to be less prominent and more aggressively partisan than the ideologically diverse outfits that contradict it. At the very least its results are hotly disputed, and it doesn't warrant the implied authority of a visual image here. VictorD7 (talk) 18:31, 19 May 2014 (UTC)

I agree that the ITEP findings come from a black box which makes it difficult to assess how they derived their numbers. I will add that 2011 is a long time ago for tax rates given the changes in 2013 with new investment income taxes and medicare surcharges on high income households, plus more aggressive phaseouts of deductions.Mattnad (talk) 18:45, 19 May 2014 (UTC)

(edit conflict)Note that there are two separate graphs in the CTJ paper linked to, with respective corresponding textual descriptions:

1. "The share of total taxes paid by the richest one percent (21.6 percent) is almost identical to that group’s share of total income (21.0 percent)."
2. "The total effective tax rate for the richest one percent (29.0 percent) is only about four percentage points higher than the total effective tax rate for the middle fifth of taxpayers (25.2 percent).2"

The graph used in the article is the "Effective Total Tax Rate" graph, with the value of 29% for the top earners.

The value of 21.1% is shown on the "Incomes and Federal, State & Local Taxes in 2011" table in the pdf file, but not in either of the graphs.

The two values cited above are not shown in graphs in either pdf, but there is an apparently large discrepancy between the two, as you indicate.

That begs the question as to the relationship between the "Effective Federal Tax Rate for the Top 1%" and the "Effective Total Tax Rate for the Top 1%" shown in the graph used in the article, not to mention the different methodologies for calculating the federal tax rate (as opposed to total, of which no mention is made in the TPC pdf. --Ubikwit ^連絡 _{見学/迷惑} 18:56, 19 May 2014 (UTC)

I agree it's a bit confusing. If you read the Tax Foundation article cited by VictorD7, the explain some of the logic behind ITEPs numbers. Interestingly, ITEP decided to exclude Federal Tax deductions for state and local taxes, even though they are mostly eliminated by the AMT as well as other deduction phaseouts for higher income households. They also add the portions of FICA paid by the employer into people's tax burden which is NOT paid by the individual (and lets not forget that FICA is mostly forced retirement savings which low income people get back and then some when they stop working). They also excluded the Earned Income Tax Credit which brings down lower income household's Federal tax burden such that the CBO indicates the bottom 20% pay on average a little less than 2% of their income in Federal taxes (not the 5% argued by ITEP). What all of this tells me is that they stacked the numbers to make taxes look as regressive as possible.Mattnad (talk) 19:39, 19 May 2014 (UTC)

Ubikwit, the CTJ just adds the columns together to get the total figure shown in their graph. 21.1% (federal) + 7.9% (state/local) = 29% (total). So hopefully you see that having a radically outlying federal component (around 10 points too low) causes problematic skewing here. VictorD7 (talk) 20:02, 19 May 2014 (UTC)

OK, thanks. I must need some sleep, as I didn't notice those two columns and then the total on the right in the CTJ graph. I see now that the point is that the 29% value is skewed by the low federal component.--Ubikwit ^連絡 _{見学/迷惑} 20:44, 19 May 2014 (UTC)

• Keep ITEP graph which is consistent with File:Distribution of U.S. Federal Taxes 2000.JPG and figures 18 and 19 on pages 26-8 here. The Tax Policy Center/Peter G. Peterson foundation series are manufactured to mislead people in to thinking that taxes have been or soon will be progressive for the top 1% when in fact their total incidence including transfers and relative lack thereof has become more regressive at a faster rate. The TPC percentage is larger because it is federal income tax only, without the very regressive state and local sales and overall payroll taxes. EllenCT (talk) 06:11, 20 May 2014 (UTC)

Contrary to EllenCT's claims, both her first (Treasury Department) and second (CBO) links show the federal tax rate for the top 1% to be around 30%, close to where the TPC and the CBO source I linked to above consistently have it, and roughly 10 points higher than CTJ does. I ask other editors to weigh in on this and publicly report back which of us is accurately representing the sources, for the benefit of readers who don't click on the links, lest their eyes glaze over and they erroneously conclude this is some sort of "he said/she said" deal. It's really quite simple and easy to see. Also, despite her final sentence above, I'll remind readers that the dramatic contradiction documented in my op is an apples to apples total federal taxation to total federal taxation comparison. EllenCT also failed to explain why she thinks a TPC chart that closely follows results from the CBO and Treasury Department (per her own link) is somehow "misleading", or what motive the TPC might have for being misleading. VictorD7 (talk) 06:58, 20 May 2014 (UTC)

Since you two experts are addressing the issue in terms that a layman like me can basically comprehend, I'll add a comment as to the point I see in EllenCT's assertion.

Fig. 18 appears to show that the rate of "Individual Income Taxes" paid by the top 1% has fallen to less than 20% since 2003-4, and that the amount of "All Federal Taxes" is slightly less than 30% per the last data shown.

If the total amount of income of the top 1 is 21%, as shown in the first graph in the CTJ pdf, then a total tax rate (as shown in the same fig.) of 21.6% would represent a difference of only 0.6%. That would seem to indicate a negligible degree of progressivity that would not prejudice the system as being characterized as "flat".

On the other hand, these figures and data do not speak in the same language with respect to all the issues, so it is hard to see what factors and conclusions should be compared in the respective studies in order to determine what the NPOV would be.

For example, though there is a significant discrepancy between 21% and 30.4%, the discrepancy approaches a negligible level between the values of 29% and 30.4%%. So, even though the CTJ pdf refers to 21% in one graph, in the other graph showing the value (effective Total Tax Rate = 29% for top 1%) that seems to correspond to the value (Average Effective Federal Tax Rates = 30.4% for top 1%) in the TPC graph show closer parity, despite the aforementioned discrepancy between 21% and 30.4%.

It is not clear what the discrepancy between 21% and 30.4 means in relation to the closer parity between 29% and 30.4%, assuming that those are comparable values.

@Lawrencekhoo:@Mattnad:further expert input would be helpful here.--Ubikwit ^連絡 _{見学/迷惑} 07:38, 20 May 2014 (UTC)

Ubikwit, remember that the CTJ's "29%" rate is for all taxes, including state/local, while the TPC's "30.4% rate is only for federal taxes. Adding state/local to that (even CTJ's uncorroborated figure of 7.9%) would increase the TPC total several points more. But the question here is whether I or EllenCT was accurately relating what her two linked sources said, and you addressed at least one of them by confirming what I said about it showing the top 1%'s federal tax rate at around 30%, which is consistent with the TPC, not CTJ. You didn't comment on the other one. I also encourage others to read and publicly relate what the links show. VictorD7 (talk) 08:37, 20 May 2014 (UTC)

I've seen economists quote the CTJ figures, so AFAIK, it is a reliable source. What this discussion is missing is that the tax laws changed in 2013. Remember the expiry of the Bush tax cuts (originally in 2010), the 'fiscal cliff' and the tax compromise hammered out in late-2012? That compromise raised taxes on the high end. (See here for pretty chart.) I'm guessing that the discrepancy between the sources is largely because one set is looking at current law (after fiscal cliff), and another set is looking at tax incidence during the Bush tax cut years. LK (talk) 09:54, 20 May 2014 (UTC)

I don't think the CTJ figures reflect the 2013 tax year that incorporated the fiscal cliff tax changes, but the TPC figures do not either. The TPC tends to track closely with the CBO calculations which is why their ~30% effective tax rate is close the level indicted by the CBO (as shown in the Krugman article) pre-tax law changes. For a clearer view the CBO indicates higher taxes under 2013 tax law in this chart here. The top 1% tax rate is well over 30% according to the CBO. If you agree with Krugman that the CBO figures are a Reliable source, they don't show an effective tax rate as low as 21% at any time in recent history. What do you think?Mattnad (talk) 10:15, 20 May 2014 (UTC)

@Mattnad:just a note, in case you forgot, Krugman also refer to the CTJ literature here, in the article referenced by LK.--Ubikwit ^連絡 _{見学/迷惑} 10:55, 20 May 2014 (UTC)

Yes he does, but I'd like to get LK's thoughts on whether he thinks the CBOs view of effective federal tax rates, as well as sources that align more closely to them, is the way to go. CTJ seems to be an outlier in this regard.Mattnad (talk) 14:14, 20 May 2014 (UTC)

LK, check again. To highlight the discrepancy between the sources I used TPC and CTJ data from the same year in the op, 2011. I also posted CBO data going back decades showing that the top 1%'s federal tax rate has been around 30% or higher for many years. Despite being a leftist polemic, Krugman simply cited pretty much the same federal CBO data I did, even capturing the recent surge to the mid 30s (though the Atlantic piece he uses as a source combines CBO and TPC data, those last few years being TPC estimates). I'm not sure why you posted it, but it adds even more evidence to CTJ's tax incidence numbers being a totally uncorroborated outlier disputed by the other sources. The 2000 Treasury Department chart linked by EllenCT showed the same thing. LK, I would appreciate it if you would acknowledge these facts (like those two op links are for 2011 not post "2013") to show that good faith, rational discussion is possible here. If we can't start from the same factual premises, or are somehow seeing different versions of reality (maybe extreme software glitch?) then there's little hope for productive collaboration. VictorD7 (talk) 18:09, 20 May 2014 (UTC)

Victor, please refer to the TPC table that you link to,[1] the column 'All Federal Taxes' includes Corporate Income Tax attributed to shareholders. The ITEP report[2] does not attribute the Corporate Income Tax to shareholders. Therein lies the difference. The figures are consistent once you take that into account. AFAIK, the ITEP is a respectable institution whose figures economists regularly use without comment (unlike the Tax Foundation, which has gotten some iffy press). LK (talk) 06:43, 21 May 2014 (UTC)

ITEP FAQ: "How does ITEP estimate the incidence of corporate income taxes? It is generally agreed that corporate income taxes, at both the state and federal level, fall primarily on owners of capital. In accordance with this theory, ITEP’s incidence analyses of state corporate income taxes typically distribute the incidence of the tax according to nationwide ownership of capital assets such as stocks and bonds.....The incidence of the tax in ITEP’s analyses is generally quite progressive, because the vast majority of capital income nationwide is held by the very best-off Americans."

CTJ opinion piece: "The Corporate Income Tax Is Borne by Shareholders and Thus Very Progressive....Corporate leaders sometimes assert that corporate income taxes are really borne by workers or consumers. But virtually all tax experts, including those at the Congressional Budget Office, the Congressional Research Service and the Treasury Department, have concluded that the owners of stock and other capital ultimately pay most corporate taxes.[5] Further, corporate leaders would not lobby Congress to lower these taxes if they did not believe their shareholders (the owners of corporations) ultimately paid them. (In contrast, corporations do not lobby for lower payroll taxes, which are borne by workers)."

I found that via ITEP's website several months ago when this was discussed in depth and it was decided to remove the chart. Here are more quotes from one of those discussions: [3]. Then there's the "Who Pays?" source you just posted. From page 8: "State personal income taxes — with their counterpart, corporate income taxes — are the main progressive element of state and local tax systems." Page 128 shows the national average breakdown, and ITEP attributed a rate of zero corporate taxes to the bottom 95%, 0.1% to the next four percent, and 0.3% to top 1%. Of course that report is just state/local, but it confirms their other public statements about attributing corporate taxes progressively to corporate owners. Clearly corporate taxes don't account for the huge discrepancy between ITEP and the other sources. You didn't confirm that your screen is properly showing the TPC page we both linked to as being for 2011, LK, but I hope you acknowledge that the claim you just made about ITEP not attributing to shareholders was a (good faith) mistake, so third party readers don't assume this is still a point of dispute. I enjoy talking to you, LK. The optimist in me feels you'll turn out to be a reasonable guy, it's just a matter of us getting on the same page regarding the basic facts. Let me humbly suggest that you start taking the assertions of whichever friend has been feeding you info on this topic so far with a well earned grain of salt. PS - ITEP mostly just appears on liberal blogs, and Krugman has had vastly more iffy press than the Tax Foundation, but that's an irrelevant tangent I'll refrain from going down. VictorD7 (talk) 07:49, 21 May 2014 (UTC)

Look, just because the ITEP states that the corporate income tax should be attributed to owners of capital does not mean that the chart that is dispute does attribute corporate income tax to capital. The figures are totally consistent once you remove corporate income tax. For example, this NYT graphic on tax rates has similar figures, it specifically states that they are based on income and payroll tax rates sourced from the CBO. So it's pretty clear that independent people get similar figures to the ITEP sourced graph if you don't attribute corporate taxes. In any case, ITEP is treated as a reliable source by other sources considered reliable, so Wikipedia should treat ITEP as RS, that's pretty much the end of it. (You can take it up with WP:RSN if you believe otherwise.)

I think we should call an end to this. A discussion of that particular graphic is moot. Because of changes to the tax code, any graphic/figures from before 2013 shouldn't be used except to illustrate historic tax rates. Whether to include or exclude corporate taxes and state/local taxes is another issue. My choice would be to either leave them both in or take them both out. As an aside, there are people who disagree with him, but I have yet to see it shown that Krugman has ever made a knowingly false statement. LK (talk) 08:08, 21 May 2014 (UTC)

LK, I just posted quotes from ITEP's own FAQ stating that they attribute to shareholders. I pointed out that your own source shows them attributing corporate taxes extremely progressively. I'm not sure what else one can do. Yes, the TPC and other sources obviously show lower rates if you only count income/payroll taxes (ignoring estate, excises, and corporate), but you can't assume that's what CTJ is doing when their own chart explicitly states it includes corporate taxes. Attributing corporate taxes differently wouldn't mathematically account for the gap with TPC anyway. Do you have a shred of evidence that CTJ/ITEP doesn't attribute corporate taxes to shareholders? PS - Actually Krugman has been accused of lying before and he's certainly been wrong a lot, but, again, that's an irrelevant tangent. We evidently have a difficult enough task just reading the same pages and seeing the same words, so let's stick to establishing agreement on the basic, pertinent facts. Updated reply to your update: No, RS is context specific. Sources are neither stamped "not RS" across the board or approved for inclusion in every circumstances no matter what. It depends on what's being added and where. ITEP is a reliable source for its own views (like the fact that it attributes corporate taxes to shareholders), but its tax incidence figures are nowhere nears as reliable, prominent, or widely cited as those by the Tax Policy Center or CBO. VictorD7 (talk) 08:23, 21 May 2014 (UTC)

OK, I see the notes now, note a and b at the bottom of the table. LK (talk) 08:33, 21 May 2014 (UTC)

Note b states "income includes ... corporate profits net of taxable dividends, neither of which is included in the average cash income figures shown." So they are attributing profits that have not been paid out directly to owners of capital, that seems unusual, and a bit shady to me (leads to double counting I suspect). I've a feeling that is how CTJ got those particular figures from the ITEP model. LK (talk) 08:47, 21 May 2014 (UTC)

Despite some different reasoning, there seems to be strong support for removing the CTJ chart, so I'll go ahead and do so. VictorD7 (talk) 08:32, 21 May 2014 (UTC)

Automatic pov?

For editors who are assuming that income inequality is a "problem," the specifics of why it is a problem needs to be laid out a bit better. This might include a sentence or two from the linked article income inequality. It could be that simple.

Quotes could (therefore) be improved by including people who give reasons for their statements and don't just assume a given outcome is obvious for obvious reasons. On a different topic, for example, "I think the speed limit on state highways should be increased/decreased because tourists are avoiding our state because the speeds they travel are too slow/there are too many fatal accidents attributed to high speeds." Just opining that speed levels should be increased or decreased seems puerile and ineffective IMO. Which is why we should probably not quote politicians! They try to be deliberately vague for credible deniability reasons. Student7 (talk) 14:29, 27 May 2014 (UTC)

We need to know (correlation works here) what the difference is in crime statistics or whatever between more equal states like Utah, Wyoming, and Alaska (besides being rather underpopulated) and DC and Puerto Rico (other than having higher population densities). In fact, might not that account for the differences, in part? High density places have more vigorous populations that stimulate an economy that permits very high wages for some? Low density places have less vigorous economies? Way it looks to me. Maybe different internationally. Right now not sure of this article utility or the Gini index at all. I 'want to believe that egregious income differences create problems, but nothing here seems to show that. More cant than fact. Student7 (talk) 15:01, 30 July 2014 (UTC)

The basic problems with increasing income inequality in my opinion are that it reduces aggregate demand (increasingly large segments of what used to be the middle class can't afford much more than essentials, which pushes production and total employment down) and monopolizes the labor force (meaning that there are fewer employers requiring fewer workers, but those who remain consolidate and take advantage of the lack of competition, leading to less choice, market abuses, and relatively higher prices.) There are a multitude of other adverse affects listed in The Spirit Level: Why More Equal Societies Almost Always Do Better and similar works, but in my opinion almost all of them are secondary. I agree that these facts need to be explained, but I've encountered very strong opposition for the high quality peer reviewed sources I've inserted explaining these topics, so I invite others to find their own and give them a try. EllenCT (talk) 21:19, 30 July 2014 (UTC)

"The basic problems with increasing income inequality [is] my opinion are that it reduces aggregate demand." It may even be a common theory, but it is not fully accepted among mainstream economists. It seems to be accepted among those economists which you consider mainstream, possibly because they have that POV. — Arthur Rubin (talk)

@Arthur Rubin: do you have any sources suggesting that any mainstream economists believe that increasing income inequality does not reduce aggregate demand? Or that any mainstream economists believe that it doesn't cause monopolization of the labor force? There is already a lengthy longstanding section on "Consumption and debt" which addresses the former directly and the latter rather obliquely. EllenCT (talk) 00:29, 11 August 2014 (UTC)

Thank you for considering the "problem" of explaining the topic. In the US, it seems to me that the really impoverished have access to (they may not accept it) various programs to alleviate hunger, medical care, and (to some extent) housing. I can believe the middle class experiences some pressure with lack of "aggregate" demand for their services/skills or whatever. And reducing the size (percentage) of middle class can result in political instability. Sorry I can't help with WP:RS. Student7 (talk) 18:19, 3 August 2014 (UTC)

delete Wage theft as "Relationship? I see none"

User:Arthur Rubin deleted the addition of Wage theft to "See also", remarking, "Relationship? I see none". The second sentence of that article says, "Wage theft, particularly from low wage legal or illegal immigrant workers, is common in the United States." It seems obvious to me that reducing the actual wages of people already paid very little and transferring that money to those more highly paid increases income inequality. This suggests to me that "wage theft" is appropriate to add to "See also", and I don't understand why User:Arthur Rubin deleted it. Either User:Arthur Rubin or I is missing something -- and probably both. Could someone else please help with this? Thanks, DavidMCEddy (talk) 06:31, 2 September 2014 (UTC)

I begin to see your point. However, illegal immigrant workers are not normally considered in income inequality; some of the examples given in wage theft, such as workers' compensation abuse, do not technically relate to "income"; and, in a minor point, "transferring that money to those more highly paid" does not appear in the article. The connection is indirect; the nearest connection is Income inequality in the United States ⇔ Income inequality ⇔ (overtime, workers' compensation, Misclassification of employees as independent contractors [actually, that does connect to this article, although the concept applies in other countries], ...) ⇔ wage theft. I'm still not convinced. — Arthur Rubin (talk) 11:44, 2 September 2014 (UTC)

1. I fail to see your point about illegal immigrant workers: Are you saying that stealing from an illegal immigrant is not theft or that stealing wages from an illegal immigrant worker is not wage theft? Or are you saying that wage theft from illegal immigrant workers in the US does not impact the statistics on income inequality? [On the latter point the wages of many (most?) illegal immigrant workers are still subject to withholding by the US Internal Revenue Service. Therefore, their income data is captured by the IRS. IRS data has been the primary source for the data analyzed by Thomas Piketty in his path breaking studies of income inequality in many countries.]

2. I also fail to see your point about workers' compensation abuse: Are you saying that people who do not collect workers' compensation when they would otherwise be eligible do not lose income? Also, why do you think employers push injured employees to not file for workers' comp or push to have the claim denied? Am I correct that employers with more workers' comp claims must pay more to support workers' comp? (It's insurance, and people or companies with higher rates of insurance claims ultimately must pay higher rates for the insurance.)

3. I agree that the article does not say where the money goes. What do you think happens to the money denied workers through wage theft? I would expect it to go to increasing the profitability of the business, to business owners and higher compensation for the senior executives, the vast majority of whom make much higher incomes than do the victims of wage theft. Is this so obscure it requires discussion in the article on wage theft?

4. Do you doubt that the victims of wage theft are mostly at the lower end of the income scale, and that wage theft depresses their incomes further? "Education, longer tenured employment, and English proficiency ... reduced the probability of wage theft" -- and increase people's wages on average. I'm confused.

5. FYI, I don't believe I've ever met either User:Arthur Rubin or User:C.J. Griffin, and I don't believe I've ever communicated with the latter. My interest in this is only because of the merits I perceive in the addition offered by C.J. Griffin; I fail to understand Arthur Rubin's concerns. DavidMCEddy (talk) 15:49, 2 September 2014 (UTC)

1.I'm saying that illegal immigrant workers are usually considered in analysis of income inequality; the section of wage theft is relevant there, but not here.

2. "Workers' compensation" abuse is not usually considered "income"; although it's defined as being relevant to "wage theft", it's not relevant to income inequality.

3. It would be WP:Original research to have mention of where the "stolen" wages go, either in "wage theft" or in an "income inequality" article, but it's not that relevant to the analysis. In other words, it not only requires discussion on wage theft, but it requires references both there and here, making the argument inappropriate for "See also".

4. That supports a relationship, as long as you don't want to imply causation. It does not imply a direct relationship, which, in my opinion, is required for listing in a "See also" section. In other words, if B is relevant to A, and C is only relevant to A through B, we list B in article A, not C. (This is my interpretation of the guidelines, which is not universally accepted. However, failure to have some such guideline would lead to unlimited expansion of the "See also" section.) — Arthur Rubin (talk) 16:39, 2 September 2014 (UTC)

While I generally agree with AR's points above (I particularly find the WP:Original research note to be on the mark), I don't find this an edit which improves the article. So beyond the policy based objections above, I find myself unconvinced based on the article improvement issue. Capitalismojo (talk) 17:35, 2 September 2014 (UTC)

I got the idea to add the Wage theft wikilink to the "see also" section after seeing this ("Wage Theft, Income Inequality, and the Fight for America's Future") during a Google search yesterday (the topic was in the news). The two seem related to me, but considering it's only a wikilink in the "see also" section I will not object to its removal if there is serious opposition to its inclusion. I've learned to pick my battles on Wikipedia.--C.J. Griffin (talk) 20:34, 2 September 2014 (UTC)

That's great. What about adding a brief summary of that source to the Wikipedia article on wage theft? Perhaps add a new section on "Consequences" right before "References"? (If that is accepted, that could change the balance of the discussion on whether a link here is appropriate ;-) DavidMCEddy (talk) 22:26, 2 September 2014 (UTC)

A good idea, but unfortunately the source provided doesn't seem to have enough content to justify adding an entire section. I'll have to do some more digging on the possible relationship between income inequality and wage theft when I have time. If good sources turn up then I'll look into adding such a section.--C.J. Griffin (talk) 02:45, 4 September 2014 (UTC)

Need more scholar references on the reasons of the growth of inequality

Target text: "Scholars and others differ as to the causes, and the significance of the trend." and "Education and increased demand for skilled labor are often cited as causes" The reference sources for the reason for income inequality points to the CIA. It is more appropriate to get more scholarly sources. http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#cite_note-CIA._.28June_14.2C_2007.29._United_States:_Economy._World_factbook.-23

— Preceding unsigned comment added by 66.205.167.110 (talk • contribs) 22:10, 6 September 2014 (UTC)

Moved from article space to discuss how to incorporate criticism throughout the article as needed

The following was moved to the talk page for discussion:

Criticism of Income Inequality Analyses, Assumptions, and Recommendations

Some Income Inequality Assumptions are Incorrect

There are several key aspects of income inequality analyses, particularly those of economists Thomas Piketty and Paul Krugman, that have been proven to be inconsistent and/or flawed. For example, one of their assertions is that wealthy Americans earn a higher rate of return on investment than lower income peers, and will ultimately create a 'patrimonial-capitalist' society controlled by only a few ultra-wealthy families, much like nineteenth-century Europe. Krugman has described it as a new "Gilded Age". "Piketty points to the Forbes 400 ranking of the wealthiest Americans from 1987 to 2013. He shows that the top 0.000001% of Americans—roughly the top 45 people on the Forbes list—earn about 6.8% on their money, while the average return on wealth is just 2.1%. Critics point out that income inequality proponents wrongly assume that this is a static list of wealthy Americans who remain rich. In reality, there has been a great deal of turnover on the Forbes 400; only 35 people from the original 1982 list remain today. Many have fallen off as a result of heavy spending, large-scale philanthropy, and bad investing. The current Forbes 400 is now primarily made up of newly wealthy business owners, not heirs and heiresses. The University of Chicago’s Steve Kaplan and Stanford University’s Joshua Rauh note that 69% of those on the list are first generation wealth creators. That figure has risen dramatically since 1982 when it stood at 40%. So it’s likely that rising income inequality is not the product of inheritance, as Piketty, Krugman, and others assume, but rather the result of entrepreneurs like Bill Gates and Jeff Bezos being paid for their ingenuity." Thus, capitalism does not contribute to an inherited-wealth stagnation and consolidation, but instead promotes the opposite ... a vigorous, ongoing turnover and creation of new wealth.

Causes of Income Inequality: Capitalist (Economic) versus Socialist (Political)

One of the primary recommendations made by income inequality proponents is central planned/ state interventionism. Abundant research, as well as empirical evidence, has demonstrated that income inequality also exists in statist (socialist) countries. However, the nature of income inequality in statist countries is driven by political, rather than economic factors ... as articulated in a recent analysis entitled "The Hidden Inequality In Socialism" (David Henderson-Naval Postgraduate School, Hoover Institution, Stanford University and Tamas Rozsas-Ministry of Economy and Transport, Department of Information Technologies and Statistics, Budapest, Hungary); "The causes of income inequality are more important than the degree of income inequality itself. In a socialist economy, income inequality hinges for the most part on differences in political power, political connections, and loyalty to the government. To better one’s economic condition in a socialist economy, therefore, one must become politically connected or, at least, must display loyalty to the government. Also, because people have little incentive to produce valuable goods in a socialist economy, most people claw for improved position in a zero-sum game in which one person’s gain is another’s loss. In a market economy, by contrast, income inequality reflects differences in productive ability for the most part. The way to better oneself economically in a market economy, therefore, is to become more productive—that is, to contribute more to the wealth of one’s fellow human beings in return for pecuniary rewards. Markets are positive-sum games. Bill Gates and Michael Dell are extraordinarily wealthy not because of their political connections but because they have produced goods that consumers value. Inequalities in a market economy, therefore, serve a useful function, giving people incentives to work harder, study more, and take sensible risks, thereby contributing to other people’s well-being. Further research should focus on the causes of inequality instead of its degree, with special attention on corruption and income redistribution through government transfers."

"Zero-Sum Game": The Rich Are Getting Richer And Making the Poor Poorer

Change In After-Tax Income By Household Position In The Income Distribution (2000 - 2010)

Share of After-Tax Income Considering Employee and Government Health Benefits and Other In-Kind Transfers 2000 - 2010

In 2012, National Affairs journal published the following, "The implicit assumption behind the case for the injustice of income inequality is that the wealthy are the reason why the poor are poor, or at least why they cannot escape their poverty. If this claim were true, it would be much easier to connect income inequality with injustice, and so to justify a redistributionist agenda. Yet this assumption rests on another economic premise that itself is highly dubious: the idea that income is a zero-sum game. Moral critics of inequality often portray total national income as if it were a pie: There is only a fixed amount to go around, they suggest, so if someone's slice gets bigger, another person's must get smaller. Much of the moral debate about income inequality seems to rest on this zero-sum theory. As Kevin Drum of Mother Jones magazine put it last year, "This income shift is real. We can debate its effects all day long, but it's real. The super rich have a much bigger piece of the pie than they used to, and that means a smaller piece of the pie for all the rest of us." In a functioning market economy, however, the total amount of income is decidedly not static; economic exchange is not a zero-sum game." This is corroborated by a Pew Charitable Trust report released in 2009 entitled "Ups and Downs: Does the American Economy Still Promote Upward Mobility?" and by a 2007 report by the Congressional Budget Office, finding that both middle and lower income Americans experienced absolute and inflation-adjusted economic gains between 1979 and 2005, thus dispelling the notion that increased earnings of high-income workers generally cause some people to be poor or prevent them from improving their economic status.

Information Used in Income Inequality Analyses, Particularly Raw Census Data, Cannot Capture Key Dynamics Such As Mobility of Incomes

The Census Bureau ranks all households by household income and then divides this distribution of households into quintiles. The highest-ranked household in each quintile provides the upper income limit for each quintile. Comparing changes in these upper income limits over time for different quintiles reveals that the income of wealthier households has been growing faster than the income of poorer households, thus giving the impression of an increasing “income gap” or “shrinking middle class.” One big problem with inferring income inequality from the census income statistics is that the census statistics provide only a snapshot of income distribution in the U.S., at a single point in time. The statistics do not reflect the reality that income for many households changes over time—i.e., incomes are mobile. For most people, income increases over time as they move from their first, low-paying job in high school to a better-paying job later in their lives. Also, some people lose income over time because of business-cycle contractions, demotions, career changes, retirement, etc. The implication of changing individual incomes is that individual households do not remain in the same income quintiles over time. Thus, comparing different income quintiles over time is like comparing apples to oranges, because it means comparing incomes of different people at different stages in their earnings profile.

In addition, there have been a number of other challenges to the integrity and interpretation of the data presented in many income inequality analyses by economists and scholars.

Most Income Inequality Analyses Do Not Take Into Account After-Tax Incomes Or In-Kind Benefits

The Brookings Institution's Gary Burtless published findings (using Congressional Budget Office data) in a 2014 report that contradicts accepted theories of income inequality, "Some crucial findings of this new study may come as a surprise, especially to people who believe incomes of the poor and middle class have stagnated since the turn of the century while incomes at the top have soared. The CBO’s latest numbers show the opposite is true. Since 2000 pre-tax and after-tax incomes have improved among Americans in the bottom 90% of the income distribution. Among Americans in the top 1% of the distribution, real incomes sank. (Chart 1)" These results reflected recent economic conditions, when the economy suffers the wealthiest absorb the greatest loss of income. However, when the economy is strong, they stand to gain the most. Between 2000 and 2010, the wealthiest took losses while other quartiles did not.

One reason that many observers fail to recognize these lower- and middle-income gains is that the nation’s most widely cited income statistics do not capture key information. "A commonly used indicator of middle class income is the Census Bureau’s estimate of median household money income. The main problem with this income measure is that it only reflects households’ before-tax cash incomes. It fails to account for changing tax burdens and the impact of income sources that do not take the form of cash. This means, for example, that tax cuts in 2001-2003 and 2008-2012 are missed in the Census statistics. Even worse, the Census Bureau measure ignores income received as in-kind benefits and health insurance coverage from employers and the government. By ignoring such benefits as well as sizeable tax cuts in the recession, the Census Bureau’s money income measure seriously overstated the income losses that middle-income families suffered in the recession. New Congressional Budget Office income statistics are beginning to show the growing importance of these items. In 1980, in-kind benefits and employer and government spending on health insurance accounted for just 6% of the after-tax incomes of households in the middle one-fifth of the distribution. By 2010 these in-kind income sources represented 17% of middle class households’ after-tax income. (Chart 4)"

"The income items missed by the Census Bureau are increasing faster than the income items included in its money income measure. What many observers miss, however, is the success of the nation’s tax and transfer systems in protecting low- and middle-income Americans against the full effects of a depressed economy. As a result of these programs, the spendable incomes of poor and middle class families have been better insulated against recession-driven losses than the incomes of Americans in the top 1%. As the CBO statistics demonstrate, incomes in the middle and at the bottom of the distribution have fared better since 2000 than incomes at the very top." Without considering these significant factors, any analysis or discussion of a widening income gap would be misleading and very likely overstated.

The Income Inequality Gap Is Not Between the Top 1 Percent and Bottom 99 Percent, It is Between the Top .5 Percent and the Bottom 99.5 Percent

Most income inequality proponents make a division between the top 1 percent of Americans and the remaining 99 percent in their income inequality analyses. However, this assertion masks a very important and contrary fact … a 2014 report by University of California, Berkeley economist Emmanuel Saez has shown that the relative net wealth of the people between the top 1.0 percentile and .5 percentile has actually dropped between 1960 and 2012 ... and their income share is nearly flat. --Mark Miller (talk) 22:12, 13 September 2014 (UTC)

References

Concerns:

• Images:

The two images are said to be public Domain as a work of the US Government...however there is no link or other information to verify this. This most be rectified or the images will be deleted.--Mark Miller (talk) 22:29, 13 September 2014 (UTC)

• Sources:

Source #1 appears to be a blog-Thomas Piketty Is Wrong: America Will Never Look Like a Jane Austen Novel, New Republic.--Mark Miller (talk) 22:32, 13 September 2014 (UTC)

Source #3 is an opinion piece-Yet Another Reason Why Thomas Piketty' Is Wrong, Forbes and cannot be used to source facts.--Mark Miller (talk) 22:36, 13 September 2014 (UTC)

Source# 5- The Hidden Inequality In Socialism, The Independent Review seems to be selling subscriptions and therefore is not the best RS. Is there a copy of this in a different form?--Mark Miller (talk) 22:40, 13 September 2014 (UTC)

Source #6- Federal Government Is A Huge Driver Of Income Inequality, Independent Journal Review is simply not there.--Mark Miller (talk) 22:45, 13 September 2014 (UTC)

Source # 10 - The Myth of Income Inequality, Scientific American is a blog.--Mark Miller (talk) 22:50, 13 September 2014 (UTC)

Discussion ...

Source #1: No need for source #1. The statement is addressed within the paragraph, and footnoted multiple times.

Source #3: Opinion piece referenced research by Stanford and University of Chicago professors that can now be directly attributed ... "It’s the Market: The Broad-Based Rise in the Return to Top Talent". Steven N. Kaplan and Joshua Rauh. University of Chicago/Stanford University. 2013. Here is a direct link to their research work ... http://faculty.chicagobooth.edu/steven.kaplan/research/krtop.pdf

Source #5: Alternative footnotes for "The Hidden Inequality In Socialism" are available ... Here are two direct sources for the footnote material ... http://econpapers.repec.org/paper/wpawuwpdc/0411012.htm http://heartland.org/policy-documents/hidden-inequality-socialism

Source #6: Footnote material was removed by the source. However, the original source of the information was located. "The Unequal State of America: Redistributing Up". Reuters, Deborah Nelson and Himanshu Ojha, Washington D.C., December 18, 2012. And direct link to the article ... http://www.reuters.com/subjects/income-inequality/washington

Source #10: Blog footnoted a research work that can be directly attributed ... National Tax Journal, December 2013, 66 (4), 893–912, "New Perspectives On Income Mobility And Inequality" Gerald Auten, Geoffrey Gee, and Nicholas Turner. Office of Tax Analysis, U.S. Treasury Department, Washington, DC, USA. And a link ... https://www.law.upenn.edu/live/files/2934-autengeeturner-perspectives-on-mobility-inequality.

General Suggestions

After reviewing the page for Income Inequality in the United States, we found a couple of errors that could use some editing. For starters, we felt the lead in page was a little overwhelming. It may be too long for a Wikipedia lead in section. It contains a paragraph of statistics that are, while interesting, perhaps unnecessary for the lead in. We feel they may be better used in later sections regarding the demographics of income inequality.

We also felt the general organization of the page could use some editing, especially in Causes and Effects. The font size of many of the headings need some work. It's currently unclear which headings suggest a new section and which are subsections. This made it difficult to follow what each heading, and therefore section, would be explaining. This is a minor change but we feel it will pull the entire article together.

Lastly, there are a few, but serious, claims made in the causes section that are not backed by a citation. An example we found was in the Race and Gender section of Causes. The statement reads, "- Among women, part of the wage gap is due to employment choices and preferences. Women are more likely to consider factors other than salary when looking for employment. On average, women are less willing to travel or relocate, take more hours off and work fewer hours, and choose college majors that lead to lower paying jobs."

We believe this is a serious statement to make but it was not followed with an immediate citation. There are several other facts in this section that make similar claims which could be taken as offensive by many. Therefore, we feel it's especially pertinent to have a citation for these claims to avoid the page appearing to have a bias. — Preceding unsigned comment added by 134.82.163.83 (talk) 20:13, 16 September 2014 (UTC)

has been the subject of study of many scholars and institutions.

i suggest we cut this trivia from the first sentence. if not, would someone explain what value the passage contributes to the lede? Darkstar1st (talk) 06:00, 17 September 2014 (UTC)

Personalizing tax changes

I find it unhelpful, as well as inaccurate and unencyclopedic, to attribute legislation to a person (Bush, Clinton, Obama). It's even inaccurate to say "the Obama Administration" since refers to the executive only. I think it would be more accurate here to say, the government did this, the government did that, rather than to attribute a particular person who may well have signed the piece of legislation. Consider how it would look if the incumbent had vetoed it and Congress overrode it! Either way, it's still "the government." Student7 (talk) 19:44, 23 September 2014 (UTC)

Agree. Purpose of the article should be to inform rather than persuade. As it stands now, the article is a political pre-text and rationale for justifying certain socio-political actions. For example, "Political Parties and Presidents' section should be struck from the article. It serves no purpose other than POV. "Republican-World" / "Democrat-World" descriptors are also unencyclopedic and biased.Tolinjr (talk) 19:17, 24 September 2014 (UTC)

@Tolinjr: what is your evidence for those statements? [4] from [5] is a strong correlation suggesting otherwise, as is [6] based on [7]. EllenCT (talk) 02:18, 29 September 2014 (UTC)

It is what it is ... or as Supreme Court Justice Stewart once said ... "I know it when I see it" http://en.wikipedia.org/wiki/I_know_it_when_I_see_it. The great majority of footnoted material in the article, whether it is considered reliable or not, is obtained from left-wing/progressive sources, websites, journals, organizations, think-tanks and opinions. Even CBO and Census data is 'spun' to produce certain results ... for the purpose of persuading and bolstering a case for action. This article has been drafted by activists who (almost uniformly) all share the same socio-political philosophies, such as progressive taxation, socialism, etc. This has become very clear in the context of the discussion and commentary surrounding the 'criticism section'. Your vehement comments about regressive taxation (consumption tax) also reveals this. Bill Gates proposed consumption taxes in March and has received significant support for it by several other groups. ( Watch this video: https://www.youtube.com/watch?v=ar0ri9NLArs ) Milton Friedman and Edmund Phelps are not 'fringe' either ... they, too, have earned Nobel Prizes in economics, just like Paul Krugman. It only looks like fringe to you because of your own perspective. And that is the problem with the article in general ... it is written from the left, and is biased with leftist and progressive opinion. Those who wrote it see it as perfectly balanced and with absolutely no need for serious challenge. I understand that. But if Wikipedia is to maintain respectability, it must focus on being informative and objective, without resorting to political nuance and persuasion. At the every least, it must permit legitimate criticism and some discussion of alternate context, other than one-liners that can easily and purposefully be shot down. Let me give you an example: The article spews venom on Reagan and Bush for cutting capital gains taxes while they were in office ... yet conveniently, Bill Clinton's capital gains rate cut from 28 to 20 percent in 1997 was never mentioned (until I put it in). Yet, his capital gains cuts were larger than Bush's. So isn't this a form of 'lying by omission'? Of course it is. The authors of the article didn't want to sully Clinton's reputation. That is the problem when same-minded activists do the authoring, the editing, and the policing of the articles. You get a single-minded result. Quite frankly, the entire article needs to be scrapped and fairly re-written. How Wikipedia can accomplish this considering the current extent of its editor demographic is a darned good question.Tolinjr (talk) 19:37, 29 September 2014 (UTC)

Please see [8], [9], and [10]. EllenCT (talk) 23:25, 29 September 2014 (UTC)

The consumption tax Gates discusses at the AEI Symposium is not the Fair Tax you are referencing here.Tolinjr (talk) 01:29, 30 September 2014 (UTC)

URL? EllenCT (talk) 03:02, 30 September 2014 (UTC)

Which is more important ... preserving a political narrative ... or making significant corrections of inaccuracies and facts in the article??

User:C.J. Griffin wishes to strike the following section because it does not fit the narrative of the article: It is a misstatement of fact to assert that all of the Top 1 Percent of Americans have all made relative wealth gains in recent years, however. Emmanuel Saez and Gabriel Zucman of the University of California, Berkeley published research in 2014, "The Distribution of US Wealth, Capital Income and Returns since 1913," asserting that since 1960, relative wealth growth has only occurred in within the Top .1 Percent of Americans. Furthermore, their analysis also shows that since 1960, those between the Top 1 Percent and Top .5 Percent have actually lost a significant share of wealth. To be more precise, more than half of the "Top 1 Percent" have lost wealth over the past fifty years.(ref>The Distribution of US Wealth, Capital Income and Returns since 1913, Emmanuel Saez, Gabriel Zucman, March 2014</ref>

C.J. Griffin would prefer that the article be maintained as is because the political narrative heretofore as been that the Top 1 Percent is often viewed as a monolithic group, all of whom have benefitted at the expense of the lower quartiles. The facts, provided by his own often-named source, economist Emmanuel Saez, prove that this is NOT FACTUALLY TRUE. Throughout the article, the Top 1 Percent is mentioned at least two dozen times, with many supporting charts, etc. But the fact is that more than half of the Top 1 Percent (those between the top 1 percent and .5 percent) have NOT GAINED IN WEALTH IN THE PAST 50 YEARS (BETWEEN 1960 and 2012). In fact, they, like the other quartiles below them ... have LOST WEALTH. This factual reality, conclusively confirmed by Saez in 2014, is that only the Top .1 Percent has significantly gained in income and wealth. This is an essential point of difference, because it drives home the fact that income and wealth compression is far worse, and more specific, to corporate and political elites (those with incomes over $2,000,000 per year).

C.J. Griffin would prefer to maintain an article that is both factually inaccurate and knowingly misleading, for the sake of maintaining a particular political narrative. I disagree. For this reason, I have replaced the text in its original location. I am open to any input that would increase the accuracy of the facts as presented in the article. However, I believe that this is such a significantly important correction of fact, especially considering how many times Top 1 Percent is flippantly used throughout the article (three times in the article's opening paragraph and 14 more times in the 'History' section alone), that it must be prominently and clearly stated, as early in the article as possible. Tolinjr (talk) 13:01, 11 October 2014

You are making an absolute wreck of this article, as YOU are the one adding POV. For example, you italicise the points that fit YOUR political perspective and often using wikipedia's voice, such as this little nugget:

"He asserts that this is a critically important and fundamental misconception, because corporatism is not an extension of capitalism ... it is actually a derivative of socialism."

Talk about factually inaccurate and misleading! This is of course anything BUT fact, and you italicise this BS in wikipedia's voice, which is HIGHLY WP:undue. In my view, what you fail to understand is that laissez-faire leads to corporatocracy through corruption of the public sector by big money, much like the Koch brothers (who inherited much of their wealth by the way) are doing today and the robber barons did in the Gilded Age. Laissez-faire capitalism is utopian nonsense and in practice will always result in monopolies, corruption of government, unstable economies, wealth concentration and inequality, and rampant exploitation of the working classes. These were all characteristics of the Gilded Age, and the poverty, inequality and abysmal working and living conditions resulted in the most violent labor clashes of the 19th century, including the Great Railroad Strike of 1877, the Haymarket Massacre, the Homestead Strike, the Pullman Strike and on and on. Government often assisted the capitalists and their pinkerton thugs in massacring workers as the government was beholden to the capitalists!

Much like in the 19th century, it is capitalist entities and the wealthy that have too much power over the government, not the other way around! A perfect example of this phenomenon, which has gone global, would be where the grand neoliberal experiment was first conducted - Augusto Pinochet's Chile from 1973-1990 - which now is the most inegalitarian nation in the OECD thanks to his "free market" reforms via the Chicago boys. Your fantasy world of unfettered capitalism creating a stable, prosperous and egalitarian society is just that - a fantasy. Democracy must keep capitalism in check or oligarchic tyranny will result, as Piketty and other economists, political scientists and sociologists rightly assert. Political philosopher Sheldon Wolin echos FDR when he notes that the US is moving towards inverted totalitarianism - where cutthroat private entities push democratic forces out of the public sector, essentially creating a form of corporate fascism.

And you clearly don't understand socialism at all, as there are many different perspectives, including Libertarian socialism (anarchism) and social democracy. Socialism is not just communism and "statism", and has absolutely nothing in common with corporate fascism. In truth, what still barely exists of socialism in practice, such as the social democratic systems of the Scandinavian countries and in particular Norway and Denmark (Sweden went too neoliberal over the last decade, but regained their sanity as inequality skyrocketed and in 2014 put the social democrats back in power), spawned some of the most egalitarian societies on earth with high rates of social mobility, and this largely attributable to such social democratic initiatives as tuition free higher education and universal healthcare. They dominate all of the indices pertaining to democratic governance, prosperity and overall human well being. So socialism (in the form of social democracy) doesn't exacerbate inequality as you spewed in the article but actually mitigates it.

You also fail to understand that this is an article on income inequality, NOT wealth inequality. Emmanuel Saez was one of the authors of a study which postulated that the top 1% have gained huge shares of income since the 1970s, which more than doubled from 9% in 1976 to 20% in 2011. He also noted in another study that since the recession the top 1% have gained a whopping 95% of all new income. So much for the top 1% losing ground on income gains!!! But I digress...

Anyway, you are inserting huge walls of text in places they don't belong. To me, it makes little sense to plug a paragraph discussing inequality in "recent years" in the history section between the decline of inequality following WWII and the post 1970 increase. Again, highly undue. Your attack on Piketty's work, which was also included there until I removed it, has been restored and moved elsewhere I see, indicating that even you understand it didn't belong there in the first place. I'd say that given the undue attack on Piketty in the opening paragraph of an entire section, this will have to be removed yet again.

And while I have made contributions to this article over the last year or so, I'm not its creator. I doubt I have contributed even 10% of its content. It existed long before I started making contributions. You act as if this is some personal crusade against me. IMO, your additions are actually making a mess of a long standing article - what with endless ranting on corporatism, socialism and Michael Moore movies (forcing me to add balance in the following paragraphs) - which is made up of contributions from a great many editors (POV italics mine).--C.J. Griffin (talk) 18:59, 11 October 2014 (UTC)

C.J. Griffin ... I attempted to balance what is a completely partisan article with a separate criticism section months ago. You tore it out and shot it down. Since then, other editors, as well as Wikipedia advisors, have recommended that I insert pieces of that section into the article. I have done that. The article, as it was before I got involved, was a completely one-sided document, full of 'gilded age', 'great compression', and 'top 1 percent' verbiage. Maybe you're too close, but do you realize that the use of all three of these statements are examples of political bias and POV? 'Top 1 percent' is mentioned no less than two dozen times (or more) in the article, yet the phrase itself (asserting that the top 1 percent have improved their state by taking from the other 99 percent) is factually not true. You know this. Your own economic prophet (whom you reference at least five times in the article), Emmanuel Saez, confirmed in 2014 that more than half of the 'top 1 percent' have lost relative wealth since 1960, just like everyone in the quartiles below them. His study clearly shows that only the top .1 percent have made significant gains during that same time period. This is a very important fact, don't you think? I realize that this does not 'fit' with your political narrative ... 99 percenters vs the 1 percent ... but the facts speak for themselves. Two more points about Saez' 2014 study ... The Distribution of US Wealth, Capital Income and Returns since 1913 ... his analysis goes back and forth between income and wealth, mainly because over time, they are inextricably linked. Wealth is the long-term accumulation of income. The Gilded Age and Rockefellers are not included in the article (and constantly mentioned by Piketty and Krugman) just because they had income, they are notable (and named in the article) because of wealth.

I urge all sincere and interested editors to read the article (Income Inequality in the United States) and ask yourselves ... how much of it factually details and explains what income inequality is ... and how much is political supposition as to the cause of it. For example: The second sentence of the article starts with a condemnation of capitalism ... and then it goes from there, with a parade of political accusations and suppositions from a plethora of progressive, liberal, and Marxist intellectuals ... so blame is being laid before the term 'income inequality' is even defined. A bit odd, isn't it?

I suggest that the article be re-written, completely focused on the data, defining trends and facts of the subject in the first half or so. If editors want to present theoretical causes and remedies of income inequality, they should be contained in a secondary section (allowing for differing theories) in the latter half. The problem with the article as it stands now, is that throughout its entire length, it mixes factual information with political opinion, supposition, and POV. The same people and same arguments are quoted over and over again. Saez, Krugman, Noah, and Piketty literally dozens of times ... 'Gilded Age' at least five times ... 'Top 1 Percent' two-dozen times.

For the record, I did not pick this battle ... I would have been happy with a 'separate cogent criticism section' as another editor originally recommended ... but you and other partisan editors decided against it and forced this edit-war. I have said this before; I think we can agree that income inequality does exist. Where we do not agree are the root causes of it. You point your finger at me and say that I am 'ranting' about corporatism ... is that not exactly what you are doing when you relentlessly skewer capitalism? We are having a discussion here ... you are not standing on Wall Street with a bullhorn.

For every Nobel economist you produce that blames capitalism, I can produce another who does not.

Truth be told ... we are actually not that far apart. You believe that corporations have become too powerful and have overtaken the state (corporatocracy). I believe that corporations have become too powerful and have formed a partnership with the state (corporatism). Where we part ways, is that you cannot allow yourself to believe that the state would be an active participant with corporations, because it would undercut your belief in the purity and necessity of state-run socialism. You simply cannot rationalize that government can be part of the problem ... because you want government to be the solution. It is natural for you blame capitalism, because in your view, corporations are capitalism ... and capitalism must be destroyed in order to pave the way for socialism. I get it. I can easily see your mindset in the history lesson you provided above. I am a small business owner, a capitalist. I am not in the top 1 percent, but I hope to be someday. I view corporatism not as capitalism, but as a threat to capitalism. I am able to segregate capitalism from corporatism ... capitalism is the corner dry cleaner, the local restaurant, the nearby bed and breakfast ... Main Street USA. These 'capitalists' are not the creators of the income inequality problem we have today. But when I see Jeff Bezos, Jeffrey Immelt, and Warren Buffett cozying up to Obama at a fund-raiser, I see corporatism ... not corporatocracy ... and certainly not capitalism.

C.J. ... For the record, among the most frequent Criticisms of Wikipedia are systemic bias, partisanship, 'hive mind' consensus, and exposure to political operatives. I would submit to you that an article like "Income Inequality in the United States" would be particularly subject to all of these. In addition, Wikipedia also recognizes that political bias exists ... Wikipedia:WikiProject Countering systemic bias/Politics and here is their recommendation ... Rather than only encouraging existing users, attempt to recruit new users to the project who can help counter these biases. C.J. ... I am one of those new users ... and I am here to counter those biases. I am open to any ideas or discussion about how we can best move forward.Tolinjr (talk) 16:52, 12 October 2014 (UTC)

"full of 'gilded age', 'great compression', and 'top 1 percent' verbiage. but do you realize that the use of all three of these statements are examples of political bias and POV?" Oh please... Referring to the tail end of the 19th century as the Gilded Age is not at all POV, as it is pretty much a universally accepted description given to us by Mark Twain (but he was one of those darn socialists!!! oh noes!!!) Now compare this to the example of blatant bias on your part by italicizing points of view you agree with. This is an example of POV pushing and should be corrected.

"Your own economic prophet (whom you reference at least five times in the article), Emmanuel Saez, confirmed in 2014 that more than half of the 'top 1 percent' have lost relative wealth since 1960, just like everyone in the quartiles below them." But they have gained the disproportionate share of income since the late 1970s, the beginning of the neoliberal era. This is irrefutable and the studies by Saez I posted in the 6th paragraph above confirm this. You are merely attempting to obfuscate the issue by emphasising wealth inequality.

"they are inextricably linked. Wealth is the long-term accumulation of income." Not necessarily. Denmark has the greatest income equality in the world, but also some of the greatest wealth inequality. Go figure.

"how much of it factually details and explains what income inequality is" I'd say the vast majority of it until recently. Again, you are confusing the issue. Saez and others, including an analysis of income data by the OECD, definitively prove that income gains have gone disproportionately to the top 1%.

"You believe that corporations have become too powerful and have overtaken the state (corporatocracy). I believe that corporations have become too powerful and have formed a partnership with the state (corporatism)." I believe that money talks and bullshit walks. Wealth concentration, an inevitability under unfettered capitalism and reaching Gilded Age levels in this neoliberal era, allows undue influence over the public sector by those who have it (the Koch brothers, Sheldon Adelson, etc), pushing aside those who don't (crushing democracy and establishing oligarchy - a more apt description perhaps than corporatocracy). Interestingly enough, it's the political Right - not the Left (and no, the Democratic party is not Left by my estimation) - who is paving the way to oligarchy through the Citizens United court ruling (pushed by the Kochs) and the establishment of nefarious lobbying organizations such as the American Legislative Exchange Council (funded by the Kochs). The latter brings together conservative state legislatures and corporate lobbyists to create such wonderful "pro-market" initiatives as ag-gag laws and the privatization of public functions, including prisons. Incidentally, the emergence of the prison-industrial complex in the 1980s is partly responsible for the US having the highest incarceration rates and largest prison population of any nation on earth. Attaching the profit motive to incarceration was clearly not a good idea, but that's neoliberalism for you...

"You point your finger at me and say that I am 'ranting' about corporatism ... is that not exactly what you are doing when you relentlessly skewer capitalism?" Prior to your edits, "capitalism" was mentioned one time in the article I believe, towards the beginning. It was also a recent edition to the article and was not added by myself. My recent emphasis in response to your additions has been on neoliberalism, so your charge is bogus.

"You simply cannot rationalize that government can be part of the problem ... because you want government to be the solution. It is natural for you blame capitalism, because in your view, corporations are capitalism ... and capitalism must be destroyed in order to pave the way for socialism. I get it." No, I don't think you do. I am not an advocate of tyrannical state socialism like the former USSR; Stalinism was murderous rubbish. I am for empowering democracy to restrain the excesses of capitalism and also empowering the working class through the strengthening of Unions (which helped push through the New Deal and especially the Fair Labor Standards Act, which wiped out sweatshops in the nation, much to the chagrin of the capitalists) and other populist, progressive and democratic movements (i.e., Occupy Wall Street, etc). The Scandinavian social democracies have some of the highest rates of union membership and some of the highest per-capita wages - not a coincidence! I am also very interested in the idea of economic democracy and worker cooperatives as correctives to the inequality, poverty and corruption that is the inevitable result of unrestrained capitalism. Mondragon in Spain and the Evergreen Cooperatives of Ohio should be shining examples to America and the world of the direction we should be heading. This is also the core aspect of socialism, workers democratically controlling the means of production.

"But when I see Jeff Bezos, Jeffrey Immelt, and Warren Buffett cozying up to Obama at a fund-raiser, I see corporatism ... not corporatocracy ... and certainly not capitalism." I see this as a phenomenon of the American political and economic system since the beginning. This is hardly different from the robber barons buying influence back in the 19th century. Are you going to simply brand that as "corporatism" as well? This is the way it has been since the emergence of industrial capitalism following the Civil War and perhaps prior to that, with the undue influence of capitalist slaveholders in the South over politics there. Richard Wolff was 100% right when he said that "pure" capitalism is a fantasy and has never existed in the United States.

But I grow tired of going round and round with you as neither of us is making any headway with the other. I'll wait for others who contribute to this article to weigh in on the issue of your recent additions, which I believe should be significantly altered (especially the POV italics) or removed altogether.--C.J. Griffin (talk) 21:17, 12 October 2014 (UTC)

Ok. So we have a basic disagreement of opinion. We can battle it out ... or seek a solution. How do you suggest we facilitate the expression of both (or all) opinions in the article? Can you agree that we should start with a definition of income inequality, first (without political judgment or commentary in the opening sentences)? Is it possible to present the income and trend data without political spin? (This might be more difficult than you think). Can you agree to keep theoretical cause and political supposition off the table for the first portion of the article while the issue, itself, is being defined? If you can agree to that, then we can move to the second part. Do you accept that legitimate alternative opinions can exist, other than yours, and that they should have the same right of being expressed as yours? And that they should receive the same respect and space as yours? I agree with you that the article would be better served if it wasn't a textual volleyball match, with tit for tat commentary going back and forth (that is why I initially suggested a separate criticism section). Would you be amenable to a 'Potential Causes' section where you could state your case, I could state mine, and others could state theirs ... keeping the political banter and POV contained in such a section? In sum, can you agree that a Wikipedia article such as this should be about 'information' ... and not be a platform for political propagandizing? I'm open if you're open.Tolinjr (talk) 13:20, 13 October 2014 (UTC)

I would agree to the removal of references to capitalism, corporatism and neoliberalism in the lede. I would also insist that ALL references to wealth inequality, especially the paragraph you inserted where it should not be (the history section), be moved to its own sub-section so as not to confuse readers, kind of like how poverty has its own small sub-section in the article. The huge opening paragraph you inserted to the "causes" section should also be moved to this same section and significantly modified or deleted altogether as it is largely an undue attack on Piketty, and the content of that BS paragraph has little to do with the causes of income disparity and is largely pushing economic liberalism. I would also insist that your pov italics be removed. The latter is absolutely non-negotiable as it is obvious POV pushing. Your additions on "corporatism" and my response to it can remain in my opinion, but perhaps it should also be moved to its own sub-section as it is clearly an ideological debate on the causes of income inequality. Those are my recommendations. I hope other editors reading this will contribute to the discussion and make their own recommendations before any significant changes are made.--C.J. Griffin (talk) 15:20, 13 October 2014 (UTC)

I just read "For example, in an article entitled Why We're In A New Gilded Age, Paul Krugman discusses the findings of Thomas Piketty's book Capital in the Twenty-First Century, and argues that the United States is developing into another patrimonial-capitalist society (controlled by only a few multi-generational wealthy families) much like nineteenth-century Europe." and then read the given article. Were is Kruman talking about a "patrimonial-capitalist society" and "only a few multi-generational wealthy families"? --Pass3456 (talk) 19:27, 13 October 2014 (UTC)

POV pushing goes both ways. If we remove all wealth references, then we must also remove all references to 'Gilded Age', 'Rockefellers', 'patrimonial-capitalism' etc., as they are primarily directed at the wealthy, not necessarily those with high incomes. Economic theory is not an absolute. Nobody has absolute knowledge in this realm, not Piketty, not Krugman ... nobody. Therefore, it is subject to differing analyses and perspectives as to cause. If Piketty, or anyone else, makes a claim that uses questionable (or selective) data or has been challenged by someone of equal caliber, then I see no problem with including it. it is not a personal attack, it is a legitimate challenge of economic theory (or in this case, a correction of statistical fact) by highly respected peers, who happened to prove (in this particular case) that his assertion is wrong. The bottom line is, corporatism is just as much a legitimate theory for income inequality as corporatocracy ... and I am sure there are others too. One thing to which I am non-negociable ... 'Top 1 Percent' is a political buzzword (thus POV), it is also factually incorrect and misleading for reasons already discussed. Based on your position, it would be perfectly okay to say the top 50 percent made greater gains than the bottom fifty percent. It is true ... but completely misleading. If half of the 'Top 1 Percent' have also lost ground financially, and you do not recognize that fact, then you are simply not being truthful, or purposefully deceitful ... all so you can wave that 99 percenter flag. That is POV. That is not right and it does not belong in a reference article such as this.

As for the Krugman article. Krugman wrote the article, including the title. He believes we are in a second Gilded Age ... that is why he wrote,Why We Are In A New Gilded Age as the title to his article. He used the term six times in the article. He completely agrees with Piketty's analysis that we have entered a second Belle Epoque (as characterized in his book as a patrimonial-capitalist / aristocratic society). Here is a Krugman quote from the review,"It has become a commonplace to say that we are living in a second Gilded Age—or, as Piketty likes to put it, a second Belle Époque." Furthermore, Wikipedia's bio on Paul Krugman also states that he has said that we are in a second Gilded Age. Similarly, Wikipedia's article on Piketty's book Capital in the Twenty-First Century, clearly mentions the term patrimonial-capitalist society. Wikipedia defines Belle Epoque as a period of economic aristocracy. Wikipedia defines Aristocracy (class) primarily in terms of 'wealthy families'. By the way, Wikipedia defines Gilded Age with such terms as 'inegalitarian' and ... 'industrialists and financiers (specific family names listed) were labeled "robber barons" by their critics, who argue their fortunes were made at the expense of the working class.' Krugman also extensively discusses inherited wealth as being a prime factor in income inequality, thus the natural 'family' connotation. I think it is pretty safe to say that Krugman was talking about the new aristocracy (wealthy families) and patrimonial-capitalist society in his review.Tolinjr (talk) 15:14, 14 October 2014 (UTC)

Please be cautious not to make a straw man fallacy and please read chapter 3: "Piketty is, of course, too good and too honest an economist to try to gloss over inconvenient facts. “US inequality in 2010,” he declares, “is quantitatively as extreme as in old Europe in the first decade of the twentieth century, but the structure of that inequality is rather clearly different.” Indeed, what we have seen in America and are starting to see elsewhere is something “radically new”—the rise of “supersalaries.” ... Yet we shouldn’t overreact to this. Even if the surge in US inequality to date has been driven mainly by wage income, capital has nonetheless been significant too. And in any case, the story looking forward is likely to be quite different. The current generation of the very rich in America may consist largely of executives rather than rentiers, people who live off accumulated capital, but these executives have heirs. And America two decades from now could be a rentier-dominated society even more unequal than Belle Époque Europe. But this doesn’t have to happen." --Pass3456 (talk) 19:48, 14 October 2014 (UTC)

Thanks. This gets to the heart of the issue, as I was discussing with C.J. Its really not just about income, its about wealth. Why else is Krugman's first recommendation to deal with income inequality ... wealth taxes? How were the Rockefellers able to make huge income gains each year ... because of wealth.Tolinjr (talk) 14:13, 15 October 2014 (UTC)

C.J. ... For what its worth ... I recently found an article, written by Paul Krugman, where he supports everything I have been saying all along. He says the war for income inequality should not be focused between the 99% and 1 percent ... he says it should be between the 99.9% and the .1 percent. http://www.nytimes.com/2011/11/25/opinion/we-are-the-99-9.html?_r=1&adxnnl=1&ref=opinion&adxnnlx=1413381816-Gy6K3nXHunUOH3N8AnSa7Q. In this article, he makes the critical distinction between 99% and 99.9% (the merely wealthy and super-elites) ... and recommends that punitive taxation or other policies should be focused on those super-elites (as opposed to the top 1 percent in general). The Atlantic also published a similar piece, using Saez' income study, to make the same point: http://www.theatlantic.com/business/archive/2014/03/how-you-i-and-everyone-got-the-top-1-percent-all-wrong/359862/.Tolinjr (talk) 20:43, 15 October 2014 (UTC)

The Krugman article does not support everything you've been spewing here - not by a long shot. It certainly doesn't bolster your claim that "it's all corporatism"! No one disputes that, as the aforementioned OECD study says, "within the group of top-income earners, incomes became more concentrated, tilting towards the richest of the rich." But the fact remains that the 1% as a whole are running away with significant levels of both wealth and income compared to everyone else. According to Saez, after the recession 95% of all income gains went to the top 1%, and Stiglitz tells us that 40% of the nations wealth is held by the same class. In fact, a new study by the Swiss bank Credit Suisse notes that this is a global phenomenon, with the top (global) 1% hoarding 48% of the world's wealth. If anything, this bolsters my point of view: that globalized neoliberalism has resulted in "exactly what one would expect: a massive increase in social and economic inequality, a marked increase in severe deprivation for the poorest nations and peoples of the world, a disastrous global environment, an unstable global economy and an unprecedented bonanza for the wealthy." (the quote is from the introduction to Profit over People: Neoliberalism and Global Order.)

And just because Krugman says something doesn't mean it's "gold" to me. For example, I vehemently disagree with his recent assertion that Obama is one of our greatest presidents. Elizabeth Warren's assessment seems more accurate to me. But I digress...

Oh, and if you believe that Gilded Age is a POV attack on the wealthy, then you are truly clueless. This has already been explained to you. That whole paragraph, which is not even properly formatted and I'm sure confusing to some readers, is comparing apples to oranges. Did I not say we should move all wealth references to their own sub-section? This an article on income inequality after all! And for the record "corporatocracy" is not mentioned in the article even once. Stop making stuff up to justify your recent edits which have lowered the quality of this article for the reasons I've already stated.--C.J. Griffin (talk) 20:48, 15 October 2014 (UTC)

Right ... "According to Saez, after the recession 95% of all income gains went to the top 1%" ... and more precisely, and truthfully, and accurately ... ALL of it went to the top .1 percent (Read the analysis!!). Everyone else in the top 1 percent are losing ground or treading water. Why can't you accept the reality of it? It's because you need the whole '99 percent vs 1 percent' argument, even if its false. As far as income ... if one of your primary recommendations at the close of the article is to implement new and more progressive 'Taxes on the Wealthy',' then this article is no longer merely a discussion about income. Gilded Age and Belle Epoque and Patrimonial-Capitalism and Rockefellers have nothing to do with income and everything to do with wealth. Let's get real. Wealth and income are inextricably linked and to attempt to separate the two for the sake of attempting to make a political argument would be a farce. If you cannot understand that the bottom line problem with income inequality in the United States is the ensuing long-term concentration of wealth, then I just don't know what to say. Tolinjr (talk) 18:27, 17 October 2014 (UTC)

I've removed most of the analysis as to whether corporatism is capitalism or socialism, as the connection to this article is not sourced. (I am not commenting as to whether it is properly sourced, or an WP:NPOB violation.) We have independent sources that corporatism contributes to inequality, and that neoliberalism contributes to inequality. That they they are the same (or even related) requires WP:SYNTHESIS. I suggest that the neoliberalism paragraphs be split to a different subsection than the corporatism paragraphs. Even if the same sources were used, those sources would have to connect corporatism and neoliberalism, in order for both to appear in the article. — Arthur Rubin (talk) 17:12, 9 November 2014 (UTC)

I agree with the changes that have been made. The whole debate on corporatism being socialism or capitalism was not appropriate for this article. I'm also pleased to see that the discussion on wealth inequality has been moved to its own sub-section.--C.J. Griffin (talk) 12:54, 10 November 2014 (UTC)

Arthur Rubin, thank you for the re-organization. Article is much improved and more cohesive. Only a few questions: Should "capitalism" be fingered as the primary cause (opening sentence) so early in the article, when there appears to be significant debate and disagreement as to what the cause of income inequality truly is (evidenced by the intense debate within the body of the article)? As the article stands now, we have not yet been given a definition of what the term "income inequality" is ... and yet, someone is already establishing what the cause is? To the reader, this appears to be an indication of bias (propaganda) right from the start. Wouldn't it make more sense to wait to make such an assertion until the "Causes" section? Same point goes for the "Causes" section itself, where we are almost immediately spoon-fed Krugman's opinions as to the causes before they are even discussed. It's like, "Why bother reading the rest of this section, here is Paul Krugman's opinion." That's been the overall problem I have had with the article from day-one ... there is a preponderance of judgement from beginning to end, often before an issue is clearly defined or discussed. Last item ... throughout the article, the term "Top 1 Percent" is used liberally (twenty-nine times) with the express purpose of separating "winners" from "losers" in the discussion. But the fact is, the majority (more than half) of the "Top 1 Percent" have also suffered financial losses, along with the rest of the 99 percent. There is a need (on the part of some partisan people) to maintain the "99 percent vs. the 1 percent" narrative. However, it seems that a key point, the concentration of wealth is really occurring among only the top .1 percent is not stated explicitly enough (one passing sentence). Its a fine point, but an important (and factual) one. Appreciate the help.Tolinjr (talk) 05:08, 12 November 2014 (UTC)

Edits - November 2015

Hello all, I've taken a shot at editing this article based on some of the discussion items.

• I think we should create a separate "Causes of income inequality in the United States" page for this, with a few paragraphs of summary here. Perhaps the cause overview section could be what remains here, with some modification.
• Removed some of the redundancy by re-organizing the article a bit.
• Removed some of the heavy table information; would support adding back in at end.
• Moved the international comparisons and measurement debates to the end.
• Reorganized causes by market and policy, to reflect the pre-tax vs. post-tax/transfer concepts better.
• Split out effects sections
• Will keep working on it over next few days.

Farcaster (talk) 20:46, 15 November 2014 (UTC)

If you need help, let me know. I'd be glad to help.Tolinjr (talk) 21:12, 15 November 2014 (UTC)

If you would like to create the "Causes..." page (assuming you think that is a good idea) I would much appreciate that while I keep chipping away the main.Farcaster (talk) 21:15, 15 November 2014 (UTC)

Thanks. I'm reading the article now. In all honesty, I would probably be better at making counter-points, rather than the initial argument (primarily because I have that viewpoint, but also because there has been contentiousness between myself and advocates regarding this article in the past and they probably do not want me to be making their arguments). Make sense?Tolinjr (talk) 21:27, 15 November 2014 (UTC)

Ok, created separate article for causes and removed much of that content from the main article.Farcaster (talk) 22:00, 15 November 2014 (UTC)