Shhh! Americans Getting Richer
Jimmy P. at the DNC— A common economic critique from liberals is that people are poorer today than they were in 2000. I have heard that statistic repeatedly here in Denver. (Dems pick that number because it was the peak of bubble boom.) But new IRS numbers show that isn't the case. A few factoids:
1) Adjusted gross income reported on tax returns in 2006, adjusted for inflation, averaged $58,029, up 1.2 percent from 2000.
2) Some 60 percent of the increase in total income went to those making more than $75,000, but less than $1 million a year.
3) Average income rose $2,291 in 2004 and $2,210 in 2005, and $1,369 in 2006—the slowdown because of the effect of inflation.
4) Salaries fell by almost 1 percent among taxpayers whose total income was $1 million or more.
Me: I am not surprised by these numbers. Although you almost never hear about it, incomes began growing strongly starting in 2003. (This is a big reason Bush got re-elected.) Here is what real disposable personal income did from the first quarter of 2003 through the first quarter of 2007: 1.7 percent, 5.0 percent, 6.3 percent, 1.7 percent, 3.7 percent, 2.4 percent, 2.9 percent, 7.5 percent, (-4.7 percent), 2.5 percent, (-1.3 percent), 7.5 percent, 5.1 percent, 1.3 percent, 2.3 percent, 5.8 percent, 4.4 percent. Then came the credit crunch and oil price spike. Again, it seems to me that when we keep the economy growing at a good clip, concerns about income inequality and wage stagnation fade. The big problem with the economy is not enough hypergrowth quarters of 5 percent or more.
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Reader Comments
Yes, But....
My income has increased significantly since 2000. But so have my expenses. Real estate, gas prices, and the cost of goods in general is killing me. I make more than 6 figures but still live paycheck to paycheck -- and I'm not spending my money on travel, lavish dinners or expensive clothing.
"2) Some 60 percent of the increase in total income went to those making more than $75,000, but less than $1 million a year.
This says everything you need to know."
Actually, it says that the tax cut had the biggest impact on the middle class, not on the rich.
"My income has increased significantly since 2000. But so have my expenses. Real estate, gas prices, and the cost of goods in general is killing me. I make more than 6 figures but still live paycheck to paycheck -- and I'm not spending my money on travel, lavish dinners or expensive clothing."
Well, my income went up as well, but so did my spending. And I only make in the high 30s. But if your expenses have gone up, how do you benefit from having to pay more in taxes? You should ask for politicians to keep them lower so you can keep more of your money to spend on the rising cost in expenses.
By the by "cost of goods" is pretty general. Kinda makes me wonder about the statement that you're making a six figure salary and still living paycheck to paycheck.
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