Came across an amazing chart from the Paris School of Economic’s database.  It allows you to customize your search for any time or place over the world.

My area of expertise is within the US and here is what I wanted to see:  the percentage of national income earned by the top 0.01%…. not just the top 1%, but the top-tip 0.01%.

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This shows the past 100 years of national income percentage earned by the top 0.01%. There are some very striking facts noticed by those looking at this data for the first time.

1) The year 2012 was one of the record highest, beaten only by two years during WWI when the rest of the world was embroiled in war, and our top echelon were selling to both sides…. If one extracts that exception, then in 2012 we gave the top 0.01% (one hundredth of one percent) more of our national income than at any time previously recorded.

2) The Great Depression did little to affect the income percentages (1928-1932);  Roosevelt however (1933-onward), did a lot.

3) During America’s most prosperous times ever, after WWII made us the sole global economy, the incomes of the top 0.01% stayed under 1% of national income across the next 43 years. (1943-1986)

4) The Reagan Tax Cut of 1986 caused a doubling of the top 1%’s income in just 2 years. from 1% in 1986 to 1.99% in 1988.

5) The percentage again dropped under 2% after Clinton’s tax hike in 1992 causing a robust expansion, but passed that 2% mark in 1997 never to return.

6) During the “w” Bush years, the percentage continuously climbed peaking in 2007 and would have peaked higher in 2008 but the recession clipped the last two months off that year. Despite that, 2008 was the 2nd highest grossing percentage up to that time (discounting the WWI anomaly) across almost 100 years of data.

7) The Great Recession (2008-9)  as did the Great Depression (1929-32), had little effect on the top 0.01% percentage of national income. At no point did their yearly take dip below 3%, a mark first crossed in 2005 (if one continues disregarding the anomaly of the First World War).

8) The rebound ability of an economy at large is hampered when more money collects at the top and is not returned as investment to the bottom. Though small in percentage points, those difference of those 3 percentage points ( from under 1.0 to 4.0) translates to $500 billion that did not impact our economy because it went to less than 31,000 Americans.  Considering our TARP was passed only for $800 billion, we only saw $300 billion net running through our economy. because $500 billion of the $800 billion was handed over to less than 31,000 people then quickly whisked away to foreign bank accounts beyond the reach of the IRS.

9) Although difficult to state through all the multiple influences that impact economies daily, the extensive overview shown by this chart makes it clear that were we to have another great recession, we should first use the incomes of our top 0.01% to first rebuild our national economy as did Roosevelt, and not assume that those wealthy will do so voluntarily as did our creators and negotiators behind this current rebound.

10)  Data from 2013 will be most interesting.  The Bush Tax Cuts for the top 0.05% were rescinded that year, and at that point, our economy took off ( at least when Republicans weren’t threatening to shut it all down).  If it does indeed show a drop in the top 1%’s income, then we will know that in order to have robust recoveries, those at the top need to be taxed more, not less.

As for politics, this needs to be taken to heart.  Anyone who argues for less taxes on the top 1%, be they Democrat or Republican, needs to be shown the door…. We now have sufficient data to know with certainty, and from it, we can see all evidence points that higher marginal tax rates do benefit the middle class and subsequently the economy at large…..

This historical chart rings that out, clear as a bell at the end of a day’s trading…..

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