US income inequality at record high

The income gap between the richest 1% of Americans and the other 99% widened to a record margin in 2012, according to an analysis of tax filings.

The top 1% of US earners collected 19.3% of household income, breaking a record previously set in 1927.

Income inequality in the US has been growing for almost three decades.

Overall, the pre-tax incomes of the top 1% of households rose 19.6% compared to a 1% increase for the rest of Americans.

And the top 10% of richest households represented just under half of all income in the year, according to the analysis.

Emmanuel Saez at the University of California, Berkeley, one of the economists who analysed the tax data, said the rise may have been in part because of sales of stock to avoid higher capital gains taxes in January.

Mr Saez wrote in an analysis that despite recent policy changes aiming at lessening income inequality, the measures were relatively small in comparison to "policy changes that took place coming out of the Great Depression".

"Therefore, it seems unlikely that US income concentration will fall much in the coming years."

Via: BBC

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EDITORIAL: The Obamanomics decline

Falling income and employment is becoming the new normal

Fewer Americans will be returning to the work force after the traditional Labor Day holiday. Labor force participation is at the lowest point since the malaise of the Carter presidency. President Obama’s economic policies have guaranteed a lower standard of living for Americans.

A recent report by Gordon Green and John Coder of Sentier Research paints the disturbing picture. On the whole, we’re less well off than we were 13 years ago. Our median income, currently $52,000, is 7 percent lower than it was in 2000, using constant dollars. It’s an especially tough punch in the gut to our youth, who’ve seen nearly 10 percent of their income evaporate. Nearly every other demographic category — married or single, man or woman — has been hit.

The consequences have been most dire for those who’ve lost their job in this stagnant economy. If they’re lucky enough to land another gig, it can take several years to make up for lost earnings for even a short spell without a paycheck. The unlucky join the ranks of the long-term unemployed, currently 4 million and growing. Prospects are grim for their return to gainful employment because the economy refuses to grow under Obamanomics.

In a healthy economy, when someone leaves his job, it opens up a space for someone else. Nowadays, full-time replacements aren’t being hired — more than two out of every three jobs created this year have been part-time. That’s reflected in the dismal labor-force participation rate that’s 3 points lower than it was a decade ago. That may not sound like much, but it means we have 7.3 million people who’ve gone from being productive members of society to being idle.

A good deal of the blame for that development can be pinned on the increased costs of hiring full-time employees under Obamacare. As small businesses scramble to stay alive in the face of increased tax and regulatory burdens, they need to do what it takes to keep payrolls lean, which is why households wind up earning less.

Via: Washington TImes

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Household income has dropped 4.4% since recession ended

The tough economy has pushed the average U.S. household income down even further than it was when the Great Recession ended.

American households are earning 4.4% less, when adjusted for inflation, than they were when the economic recovery began four years ago, according to a recent report by Sentier Research.

In June, the median income clocked in at $52,098, down from the $54,478 earned in June 2009. That drop is even more drastic when compared against the average income of $55,480 that households earned in December 2007, when the recession began.

TOP 10: Jobs with the longest and shortest workdays

"Almost every group is worse off than it was four years ago," said Gordon Green of Sentier Research. Demographic groups such as the middle-aged, part-time workers and women with children have suffered even worse than the average.

The one exception, Green noted, are households of people 65 to 74 years old.

Breaking down the data geographically shows that people living in the South, Northeast and West also saw their incomes drop. However, Midwesterners -- the one exception to shrinking earnings -- actually saw their income rise by a small 0.8% to $52,620.

Via: LA Times

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Median income in Ohio hits 27-year low

ANOTHER EXAMPLE OF OBAMA POLICIES WORKING THEIR MAGIC.  

Ohio households were poorer last year than they’ve been in more than 25 years, and the number of people living in poverty is higher than it’s been in more than 30 years, according to a census report released yesterday.

“People are getting squeezed from every direction,” said James Newton, chief economic adviser to Commerce National Bank.

When adjusted for inflation, the 2010 annual median household income in Ohio of $46,093 was down by $543 from the previous year, and down 15.3 percent from the peak of $54,395 in 2000, according to the census’s Current Population Survey, which was released yesterday.

The inflation-adjusted figure hasn’t been lower for Ohio since officials began keeping that record in 1984, census officials said.

Ohio’s level of poverty — 15.3 percent — was worse than the nation’s, which was at 15.1 percent. Ohio’s level jumped 2 percentage points from 2009; it has never been this high since those records were first kept in 1980.

The worst year before 2010 was 1994, when 14.1 percent of Ohioans were in poverty.

Via: The Columbus Dispatch

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US median household income in 2011 lowest since 1995

The median income of US households in 2011 dropped to its lowest level since 1995, highlighting the income pressure on Americans on middle to lower steps of the economic pyramid.

The median level is the mid point where half the population sample are above and half below. It avoids the distortions caused by top earners in average income data.

Real median household income in the United States in 2011 was $50,054, a 1.5% decline from the 2010 median and the second consecutive annual drop.

The nation's official poverty rate in 2011 was 15.0%, with 46.2m people in poverty. After three consecutive years of increases, neither the poverty rate nor the number of people in poverty were statistically different from the 2010 estimates.

As defined by the Office of Management and Budget and updated for inflation using the Consumer Price Index, the weighted average poverty threshold for a family of four in 2011 was $23,021.


The number of people without health insurance coverage declined from 50.0m in 2010 to 48.6m in 2011, as did the percentage without coverage - - from 16.3% in 2010 to 15.7% in 2011.

In 2011, real median household income was 8.1% lower than in 2007, the year before the most recent recession, and was 8.9% lower than the median household income peak that occurred in 1999.

In 2011, the median earnings of women who worked full time, year-round ($37,118) was 77% of that for men working full time, year-round ($48,202) - - not statistically different from the 2010 ratio. Real median earnings of both men and women who worked full time, year-round declined by 2.5% between 2010 and 2011. The rates of decline for men and women were not statistically different from one another.

Via: FinFacts

More Tips to Avoid Obamacare’s 3.8% Surtax

“It’s a tax that punishes people that have been diligent over the years and did the right thing,” says Certified Public Accountant Bob Keebler on the Medicare surtax that kicks in on Jan.1. 

As I wrote last week, the additional 3.8% tax is part of the president's Patient Protection and Affordable Care Act, ak.a. “Obamacare,” and affects individuals Congress has decided are “wealthy:” single taxpayers with modified adjusted gross income (MAGI) of $200,000 or more and married couples with a MAGI of at least $250,000.

If you fall into one of these categories, you’ll pay 3.8% more in federal income tax on the lesser of your investment income or your “excess” MAGI- the amount that exceeds the $200,000 or $250,000 threshold.

“Congress has introduced a third dimension- this surtax- that will affect every investment decision and transaction you make,” warns Keebler, who holds a Master of Science degree in taxation and addresses tax professionals around the country.

Via: Fox Business

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