Is There a Giant Chasm between Economic Brackets?

In terms of statistical categories, it is true that that both the amount of income and the proportion of those within that statistical category in the 20 percent bracket have risen over the years, thereby opening further the gap between the top and bottom economic quintiles. This information, however useless, may emollient those who view the human being through the collective (i.e. Paul Krugman, Thomas Friedman and Eugene Washington), or through class conflict. But these data do very little for those wishing to view the human experiment through the prism of the individual. In short, it says very little about the complexities of America’ capitalism (what little of it is left).

In point of fact, the U.S. Treasury Department, following specific individual’s IRS tax returns over a 40 year period of time, rather than following a general population, found that particular tax payers who were in the bottom 20 percent in income in 1996 rose 91 percent — 91 percent! — by 2005 and, moreover, those in the top 5 percent and top one percent actually declined.

Most people (individuals) begin their careers at the very bottom rung, slowly earning experience and skill as they climb progressively higher up the ladder, which, inevitably, leads to higher wages, better benefits and a greater increase in social status (i.e. being labeled one of the 1 percent). For example, according to the U.S. Treasury Department, more than three-quarters of working Americans whose incomes were in the bottom 20 percent in 1975 were also in the top 40 percent! of income earners by 1991. Moreover, only 5 percent of those who were initially in the bottom stratum were still there in 1991.

Obviously, based on the data above, focusing myopically on income brackets over the actual incomes of individual Americans is a huge economic loser. It is grossly, disturbingly ignorant to suppose, as many political economists do, that Americans move in monolithic blocks toward predetermined income brackets. It makes for a rather convenient talking point, but it certainly is not constructive to Americans politics. 

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