The inequality I talked about earlier today has been caused on a couple of levels.
While the market income of the top 1 percent has exploded, it has also paid lower tax rates on that windfall.
James Kwak posts this Tax Policy Center chart, which shows how the Bush tax cuts changed after-tax incomes dramatically at the tippy top and not-so-dramatically everywhere else, including in the 95th to 99th percentiles:
— Meantime, The Atlantic’s Derek Thompson takes a similar tack on the CBO inequality study and Pethokoukis’s post—and did it several hours earlier than I did:
A new study from the Congressional Budget Office tells us what we all (should) already know: income inequality is real and the causes are terrifyingly inextricable.
That was the takeaway from five economic studies collected by James Pethokoukis that found income gains were shared fairly equally in the 30 years before the Great Recession. What little income inequality existed, he claimed, was off-set by inflation. The stuff that the richest 10 percent like to buy has gotten more expensive than the stuff the poorest 10 percent like to buy. So, not only are low-income households making real money, but also their income is going further every year.
These studies are important contributions to the broader debate about the working class. But they represent a minority opinion. Almost everything we know about wages and prices tells us that the typical household has suffered a Lost Decade for market wages. Just as important, the price of necessities — such as health care, a college education, a house, and energy to heat your home and run your car engine — is growing faster than our incomes.
— Les Hinton, former CEO of Dow Jones, owner of The Wall Street Journal, this week testified yet again before Parliament on the Murdoch hacking scandal, and gives The Guardian’s Simon Hoggart a fun column.
Last go-round, Hinton’s “do not recalls” filled the transcripts. This time he at least made the transcripts less repetitive:
He had dozens of different ways of saying: “I don’t know”, or at least: “I’m not going to tell you.”
“That was quite a while ago,” was an early choice.
It was all a mystery to Mr Hinton. “Until I am aware of what happened, that is not a question I can properly answer, but I really look forward to the day I can.”
Damian Collins asked if he accepted the committee had been misled. “I, er, think, I, at the time and it’s very easy to look back from this more different environment we are in too, we thought what we had done was sufficient, looking back at it now, I am really looking forward to finding out what did unfold and what we might have done.”