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Came across this at NYT today:

 

income-600.svg

Since 1980, the incomes of the very rich have grown faster than the economy. The upper middle class has kept pace with the economy, while the middle class and poor have fallen behind.

sorry the graph doesn't scale, but this is not the actual values, but the amount of INCREASE.  The top lie is the 0.01%, the second the 1% the dark line in the middle with a second line following is the top 10% of after tax earners and the GDP of the USA.   Those below are the "middle class" income and the bottom line is "lower class" income.

not sure if you can read this link without subscription:    https://www.nytimes.com/2019/02/24/opinion/income-inequality-upper-middle-class.html?campaign_id=9&emc=edit_nn_20200710&instance_id=20197&nl=the-morning&regi_id=100982531&segment_id=33074&te=1&user_id=2a3e757b2285568cc6aee5465e9acea4

What would be far more interesting to me is not this comparative rate of growth, but a clear depection of the ACTUAL dollars involved.   By some logic, the top line would be something like three orders of magnitude greater in difference - clearly pointing out just how poorly the North American (assume safely that Canada would look very much like the US in this respect) economy distributes wealth.

What never fails to amaze me is that everyone can clearly see these values, but NOBODY seems to understand what drives it:   speculative gain.   This is what crashed the economy of the world in 1929 and SHOULD have corrected once more in 2008, but those with the power to steer the economic ship simply declared themselves "too big to fail" and went right along wildly disproportionally redistributing wealth without the bother of having to create any wealth in the process.

 
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1917: Finance minister Sir Thomas White introduced “temporary” corporate and personal income taxes to finance the war effort. 1943: Finance minister J.L. Ilsley introduced “pay as you earn” measu

Thanks... will sleep better now...  

All wage quintiles in the U.S. have seen growth since the 1980's, and the bottom quintile benefited more before that because of wage laws.   I would not presume U.S. data to apply to Canada or Mexico, which have their own labour laws and economic conditions.

 

saupload_78652f6f97e7271e54aa78d9b9a7231

Edited by bush_cheney2004
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37 minutes ago, bush_cheney2004 said:

All wage quintiles in the U.S. have seen growth since the 1980's, and the bottom quintile benefited more before that because of wage laws.   I would not presume U.S. data to apply to Canada or Mexico, which have their own labour laws and economic conditions.

 

saupload_78652f6f97e7271e54aa78d9b9a7231

That graph isn't individual wage or income growth, it's household income growth, which includes the increasing % of dual-income households.  It also doesn't look at the rising cost of living such as in housing.

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21 minutes ago, Moonlight Graham said:

That graph isn't individual wage or income growth, it's household income growth, which includes the increasing % of dual-income households.  It also doesn't look at the rising cost of living such as in housing.

 

Household income growth would include single income households.

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1 hour ago, bush_cheney2004 said:

All wage quintiles in the U.S. have seen growth since the 1980's, and the bottom quintile benefited more before that because of wage laws.  

I think you miss the point: an income increase of $1,000 a week isn't the same as $10,000 per week.  Why are a few people gaining so much more than the majority?  Certainly not because they work that much harder or that these increases represent the cost of living; its largely the result of policies that finacially reward a few people while reducing the financial reward to most people.   

1 hour ago, bush_cheney2004 said:

I would not presume U.S. data to apply to Canada or Mexico, which have their own labour laws and economic conditions

True, Canada has some inequality but not to the extent that the US does.  Still certain sectors within Canada actively work to match the US in this regard.  

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3 minutes ago, dialamah said:

I think you miss the point: an income increase of $1,000 a week isn't the same as $10,000 per week.  Why are a few people gaining so much more than the majority?  Certainly not because they work that much harder or that these increases represent the cost of living; its largely the result of policies that finacially reward a few people while reducing the financial reward to most people.  

 

Wage and investment income from wealth are two different things.   Middle and lower quintile wage earners also benefited from retirement plans and benefits that had significant investment growth because of the U.S. economy, including Canada's pension plan (more than 50% invested in U.S. equities...more than in Canada).

 

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True, Canada has some inequality but not to the extent that the US does.  Still certain sectors within Canada actively work to match the US in this regard.  

 

Could be...but I want to see the data.    I don't know why Canadian wage and income growth analysis is not just as readily available from government (e.g. StatsCan) and private sources.

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27 minutes ago, bush_cheney2004 said:

Middle and lower quintile wage earners also benefited from retirement plans and benefits that had significant investment growth because of the U.S. economy

Fewer people have access to such benefits, and there's ongoing effort to reduce access and reduce liability.  Corporations make record profits, but declare decent wages and pension packages are too expensive.  They deliberately hire part-time workers to avoid paying benefits, including pensions, and change the structure of pension plans to pay less to claimants. 

27 minutes ago, bush_cheney2004 said:

Could be...but I want to see the data.    I don't know why Canadian wage and income growth analysis is not just as readily available from government (e.g. StatsCan) and private sources.

Here.

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6 minutes ago, dialamah said:

Fewer people have access to such benefits, and there's ongoing effort to reduce access and reduce liability.  Corporations make record profits, but declare decent wages and pension packages are too expensive.  They deliberately hire part-time workers to avoid paying benefits, including pensions, and change the structure of pension plans to pay less to claimants.

 

Far more government workers do have access to such pensions, as do far more unionized workers in Canada.   Defined  contribution plans have directly benefited many workers with tax deferred retirement planning and tax advantages.

 

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Great....Canadian data for Canada...what a concept.   Thanks.

...but still not raw data.

Edited by bush_cheney2004
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Just now, dialamah said:

Thats not the population as a whole,  so its irrelevant to the discussion.

 

It's very relevant for all unionized workers, which includes government workers.

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6 minutes ago, bush_cheney2004 said:

It's very relevant for all unionized workers, which includes government workers.

"Eyeroll".  Not relevant to the discussion of increasing income inequality in Canada, the US and in many other parts of the world.  Stop trying to derail the discussion.

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Just now, dialamah said:

"Eyeroll".  Not relevant to the discussion of increasing income inequality in Canada, the US and in many other parts of the world.  Stop trying to derail the discussion.

 

The topic is not income inequality (your agenda) ...it is income growth.

 

Quintile data for Canada is provided here, but is hardly up to date for a government source...sheeesh !

 

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https://ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02105.html

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7 minutes ago, bush_cheney2004 said:

The topic is not income inequality (your agenda) ...it is income growth.

You're correct, my mistake.  Nonetheless, government workers are irrelevant to the discussion.  

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8 minutes ago, dialamah said:

You're correct, my mistake.  Nonetheless, government workers are irrelevant to the discussion.  

 

The government and unionized workforce enjoys significant wage premiums over the private sector, with more associated employment benefits as well.

https://www.fraserinstitute.org/sites/default/files/comparing-government-and-private-sector-compensation-in-canada.pdf

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3 hours ago, bush_cheney2004 said:

 

Household income growth would include single income households.

Single income households have plummeted in the last 40 years I assume.  In 1980 lots of families with married parents still had a single breadwinner.  For this topic we should be looking at individual income growth not household income growth, since the latter includes different variables besides individual wage, such as I said the number of income earners in the house.

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1 minute ago, Moonlight Graham said:

Single income households have plummeted in the last 40 years I assume.  In 1980 lots of families with married parents still had a single breadwinner.  For this topic we should be looking at individual income growth not household income growth, since the latter includes different variables besides individual wage, such as I said the number of income earners in the house.

 

OK, but that is not how income statistics are usually aggregated and reported by government or other sources.

If you can parse the data that way for Canada, go for it.

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Posted (edited)

The numbers that diverge from the GDP defined "average" were the 1% of 0.01% - who seldom have significant amount of their income derived from wages.  When it comes to those two portions, the speculative/finance world in Canada/US sees no borders.   I can agree with NYT that the 10% line follows GDP, but to defend that group against tax increases in a country that has $24 Trillion federal and another $5 or so state and muni accumulated debt and counting very rapidly is insane.  The US government debt now far eclipses the value of the economy.  Canada is quite different in this matter - but hardly "better".   Our federal debt around $1.2T (https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1010000201) according to how Statscan is reporting, but others estimate the combined fed/prov/muni debt load to be about $3.2 Cdn =$2.4 US, given the usual 10:1 ratio about the same as the US but our GDP is something like $2T, so we are WAY beyond the sad state of affairs in the USA.

Meanwhile, both countries simply watch all of the investment capital shift over to the Casino Capitalist courtyard of Wall Street and Bay Street, fleecing the real economy of the investment capital needed to create wealth.   Worse yet: we let them (the 1% but far more to the point the 0.01%) do so with a free ride on the real taxpayers' backs. 

Edited by cannuck
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1 hour ago, cannuck said:

Meanwhile, both countries simply watch all of the investment capital shift over to the Casino Capitalist courtyard of Wall Street and Bay Street, fleecing the real economy of the investment capital needed to create wealth.   Worse yet: we let them (the 1% but far more to the point the 0.01%) do so with a free ride on the real taxpayers' backs. 

 

If your concern is the amount of accumulating debt, then the place to start is spending, not marginal tax rates on income or other clawbacks.  Government cannot tax its way out of debt at current spending and debt service levels even if it wanted to because there are not enough 0.01% filthy rich people.  At a minimum, one has to include spending reductions and reduced entitlements along with collecting more revenue.

Shutting down the "casino" would also remove more from the revenue side, and reduce available capital for investment and economic growth.

 

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Posted (edited)

You can't "unspend" yourself from nearly $30Tn of debt.   You can stop the growth - all it takes is one simple constitutional amendment to forever prevent ANY government from deficits without a corresponding one time only plebecite for very, very special circumstances.  It is one of my absolute best scenario visions for some day when actual intelligence begins to wake up and become government (in other words...NEVER gonna happen).   The reasons it is so important is #1 constant debt growth and this scale of debt is not sustainable and most of all, making politicians pay the bills for their promises makes them accountable in real time for their spending.

The revenue from the Casino is miniscule relative to what they plunder freely.   To put things into perspective, the exposure to derivatives alone on the Street is something like 20 to 30 times WORLD GDP.  The "money for nothing" from the speculative gain on these sythetic instruments is purely inflationary and becomes a liability to the taxpayer - all the while maybe collecting a few per cent on a good year of the action, but not likely ever that much.   Since each and every speculative gain creates no wealth at all, but DOES pose an inflationary liability against the currency of the US, it is perfectly logical to tax ALL of that gain back to the benefit of those who are liable to satiate the pure greed that drives speculative transactions.   The big side benefit is that the only way of "investing" to earn a return would be to actually invest in wealth creating activities (i.e. Main Street) to receive tax free benefits by sharing dividends.

Edited by cannuck
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11 minutes ago, cannuck said:

You can't "unspend" yourself from nearly $30Tn of debt.   You can stop the growth - all it takes is one simple constitutional amendment to forever prevent ANY government from deficits without a corresponding one time only plebecite for very, very special circumstances. 

 

Governments don't have to "unspend" all of the debt, as that will never and should never happen.   Government can strive to limit deficit spending and debt service impact on budgets and appropriations (discretionary and non-discretionary spending).   Debt can also be partially mitigated with monetary policy through central banks.

 

Quote

The revenue from the Casino is miniscule relative to what they plunder freely.   To put things into perspective, the exposure to derivatives alone on the Street is something like 20 to 30 times WORLD GDP.  The "money for nothing" from the speculative gain on these sythetic instruments is purely inflationary and becomes a liability to the taxpayer - all the while maybe collecting a few per cent on a good year of the action, but not likely ever that much.

 

Well, such estimates are very dramatic, but often conflate and confuse notional value vs. actual market value.

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On 7/11/2020 at 10:42 AM, bush_cheney2004 said:

 

If your concern is the amount of accumulating debt, then the place to start is spending, not marginal tax rates on income or other clawbacks.  Government cannot tax its way out of debt at current spending and debt service levels even if it wanted to because there are not enough 0.01% filthy rich people.  At a minimum, one has to include spending reductions and reduced entitlements along with collecting more revenue.

Shutting down the "casino" would also remove more from the revenue side, and reduce available capital for investment and economic growth.

They should also generate more revenue by punishing people who use offshore tax havens.  But they won't, because the system is controlled by the people who use them.

I'd love to see how much Trump or Morneau pays in taxes.

Edited by Moonlight Graham
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Posted (edited)
11 hours ago, Moonlight Graham said:

They should also generate more revenue by punishing people who use offshore tax havens.  But they won't, because the system is controlled by the people who use them.

I'd love to see how much Trump or Morneau pays in taxes.

Bingo.  You win the interwebs today.  Finance in the USA has been controlled exclusively by Golman Sucks for many administrations, and Morneau is very much Bay Street personified.  The foxes are running the chicken coop.

Edited by cannuck
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3 hours ago, cannuck said:

Bingo.  You win the interwebs today.  Finance in the USA has been controlled exclusively by Golman Sucks for many administrations, and Morneau is very much Bay Street personified.  The foxes are running the chicken coop.

 

Not for tax havens, which actually go back to purposeful government polices during the League of Nations about 100 years ago.

Foxes will always take what is so easily given to them.

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