income distribution

The income imbalance is gigantic.  You may have see this before.  It is our income imbalance as seen in three perspectives… What it is… versus what we think it is,… versus what we would like it to be.

So what would it take to make it like we would like it to be?

Obviously we would take the top 20% down from 85% ownership to around 30%… a  drop by 55% of the nation’s wealth. That would be divvied up though not equally, among the other four 20%….

So what if we used those numerical principles to tackle income inequality?  Then instead of wealth, simply use the same alignment picked by most Americans to figure out a theoretical income distribution?

In 2007 prior to the Recession American families brought in $7..723 trillion dollars….  one half of that went to the two 20% with incomes over $100,000..

If our aim were to move the slider from 50% down to 35%… then this is how much a percent of national income, the top 10% would take…   From 50% to 35% is 15% and fifteen percent of $7.7 trillion is $1.1 trillion dollars each year…

So basically to get the middle class back to where it was in the past, we need to take $1 trillion a year from the top 10% and give it back to everyone else…

America is roughly at 315 million people. and they live in 123 million households… If we lop off the top 20%, we have 80% left which is 252 million people or 98.4 million households…

Giving us 25 million households giving up their $1 trillion to be split up with 98.4 million households.

The average given would be $40,000 given up by 25 million households per year. And if spread across America’s other 80%, it would average………………..$10,204……

The economic value of that total gets reflected by the memory that the wealthy don’t spend the $40,000 into the economy; they lock it away in stocks. But an yearly extra $10,000 in the hands of the stressed 80%, gives a big boost to economic demand.

And this does not get us to equal. It is just where Americans think the levels inequality SHOULD be.

In fiscal 2014, the federal government collected nearly $1.4 trillion from individual income taxes, making it the national government’s single-biggest revenue source. (Along with corporate income taxes and payroll taxes, other sources of federal revenue include gasoline and cigarette taxes, estate taxes, customs duties and payments from the Federal Reserve.)

WE are saying this now needs to be raised to $2.4 trillion with ALL that average increase borne by the top quintile… As a rough estimate (since they are actually paying near a 25% real tax rate now), because we need double the intake of income, doubling their rates up to the 50% level for the highest margins, would bring us close to parity. Exactly to the level to which Ronald Reagan cut taxes in his first term.

THAT, should give you an indication of where we were at one time, and how bad things have been allowed to slip away from the middle class.

I should add, there is only ONE candidate who is addressing this issue…All other candidates are pandering to those who already “have”…..