Thursday, October 27, 2011

Only the top one percent of American households has gained a larger share of after-tax income

Recall from a previous post that that lower-income households spend a larger fraction of their income on state and local taxes than do higher-income households.

The figure [source] is based on 2009 data. The following is the online summary of an October 2011 report from the Congressional Budget Office, “Trends in the Distribution of Household Income Between 1979 and 2007.” The report does not take into account non-federal taxes, which have risen, and thus the growing disparity in after-tax income is more pronounced than indicated.

After-tax income for the highest-income households grew more than it did for any other group. (After-tax income is income after federal taxes have been deducted and government transfers — which are payments to people through such programs as Social Security and Unemployment Insurance — have been added.)

CBO finds that, between 1979 and 2007, income grew by:

  • 275 percent for the top 1 percent of households,
  • 65 percent for the next 19 percent,
  • Just under 40 percent for the next 60 percent, and
  • 18 percent for the bottom 20 percent.

homepage graphic

The share of income going to higher-income households rose, while the share going to lower-income households fell.

  • The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.
  • Most of that growth went to the top 1 percent of the population.
  • All other groups saw their shares decline by 2 to 3 percentage points.

Market Income Shifted Toward Higher-Income Households

Shifts in the distribution of market income underlie most of the changes in the distribution of after-tax income. (Market income—or income before taxes and transfers—includes labor income, business income, capital income, capital gains, and income from other sources such as pensions.)

  • Each source of market income was less evenly distributed in 2007 than in 1979.
  • More concentrated sources of income (such as business income and capital gains) grew faster than less concentrated sources (such as labor income).

Government Transfers and Federal Taxes Became Less Redistributive

Government transfers and federal taxes both help to even out the income distribution. Transfers boost income the most for lower-income households, while taxes claim a larger share of income as people's income rises.

In 2007, federal taxes and transfers reduced the dispersion of income by 20 percent, but that equalizing effect was larger in 1979.

  • The share of transfer payments to the lowest-income households declined.
  • The overall average federal tax rate fell.
Taking non-federal taxes into account, the apparent slight gain in share of after-tax income for households in the 81st to 99th percentiles is erased. Only the top one percent has gained a larger share of after-tax income since 1979.

Tuesday, October 18, 2011

Occupy Wall Street coverage at Al Jazeera English

I've kept my promise to have a look at Al Jazeera English, and I'm glad I did.

I began with an episode of Inside Story, “'Occupy': A catalyst for change?” The host is Mike Hanna, who used to work as a senior international correspondent for CNN. He interviews a “media team member” of Occupy Wall Street and an independent trader based in the U.K. The news media are full of unsupported claims that Occupy has no coherent objectives. Hanna starts by asserting, “There's no real, defined agenda, no list of demands,” but goes on to ask, “What, exactly, are people gathering around?” And, miracle of miracles, the Occupy spokesman is ready with a brief and clear answer:

Well, fundamentally what we're looking for is economic justice. We want to create a society where the needs of the vast majority of people are prioritized over the profits of a small number of corporations, which have an undue influence over the organization of our society. And, moreover, we're looking for a more-democratic structure — a way that people can actually hold those officials that make these decisions accountable. Those are the two fundamental things we're looking for.
It turns out that the trader sympathizes with Occupy, though his focus is on getting people to take control of their own investments, and thereby disempower the banking and securities firms that have screwed them over. The spokesman correctly points out that most of the “99 percent” have nothing to invest. As I've mentioned before, about 97 percent of American wealth is concentrated on 50 percent of households.

I‘ve also found that Al Jazeera English has a remarkable collection of opinion pieces from around the world. Here a Jewish writer responds to charges by conservatives that Occupy Wall Street is anti-Semitic. The coup de grâce is the video at the end.

It was shot at the Wall Street demonstration on Yom Kippur Eve and it features not a few anti-Semites but thousands of Jews celebrating the holiest day of the Jewish year, a day dedicated to the same ideals as Occupy Wall Street: Repentance for putting our desires before the needs of the poor, the homeless, and the exploited.
The film Control Room, one of very few documentaries I give a five-star rating, exploded my prejudice about Al Jazeera. It
peers into the controversial and often dangerous operations of the Al Jazeera news network, an outlet that's become the most accepted informational resource in the Arab community — even though it often enrages its own people. Egyptian-American filmmaker Jehane Noujaim gains extraordinary access to Al Jazeera journalists and examines the risks they confront on a daily basis by simply doing their jobs.
I'm guessing that I've missed Al Jazeera English because other news sites rarely link to it. I'll be checking it daily, at least for a while.

Liberal bias of National Public Radio

National Public Radio (NPR) has a non-liberal ombudsman. He scrutinizes the network's reporting in “On Murdoch and Liberal Bias At NPR.” I posted the following comment:
What I note time and again in interaction with those who recite the “liberal media” mantra is that they want their preconceptions to be confirmed, rather than challenged. I want precisely the opposite. I go first to the BBC News each day, and I'll be checking out Al Jazeera English, as another commenter suggested.

I've tried hard to find liberal bias in NPR's coverage. I see virtually none in the straight reporting, but quite a bit in the selection of features. For instance, NPR doesn't provide much coverage of those who say that “the government is taking our hard-earned money and giving it to THEM.” It gives us plenty of heart-wrenching stories about “THEM.” I've gained much more understanding of how the former group distances itself from the latter in Facebook interactions than by listening to NPR.

Sunday, October 9, 2011

“Leak” regarding decision to kill Anwar al-Awlaki

It is no secret that the United States government passes information to the citizenry about covert operations, while maintaining an official policy of not discussing them, with orchestrated “leaks” to the news media. Yesterday the New York Times reported, “Secret U.S. Memo Made Legal Case to Kill a Citizen.”
The memo, written last year, followed months of extensive interagency deliberations and offers a glimpse into the legal debate that led to one of the most significant decisions made by President Obama — to move ahead with the killing of an American citizen [Anwar al-Awlaki] without a trial.
That is strange wording, considering that the reporter, Pulitzer prize-winner Charlie Savage, claims only to have second-hand knowledge of the document. Perhaps he was allowed to read it, on the condition that he not report that he did.

Although the argument for the legality of the killing was multifaceted, it was predicated crucially on the notion that, because Congress authorized the use of military force in response to Al Quaeda, the United States is genuinely at war with the organization. I previously ranted against interpreting the “War on Terror” literally. (I did not know at the time that a U.S. citizen not on the CIA’s “capture or kill” list, Samir Khan, died along with al-Awlaki.) Robert M. Chesney, a University of Texas law professor specializing in national security law, regards the killings as legal, but acknowledges that they are “‘plenty controversial’ among legal specialists.” He says, “What’s tricky here is that many people don’t accept that this is a war.”

Thus I went to the crux when I pointed out that the U.S. indicted Osama bin Laden as a criminal, not a combatant in a literal war, in 1998. Only when the crimes of Al Qaeda became more horrific did the U.S. respond with military action. I insist that a military response to crime does not convert crime into warfare.

Tuesday, October 4, 2011

More American lawlessness in the “War on Terror”

The government is targeting an American citizen for death without any legal process whatsoever, while at the same time impeding lawyers from challenging that death sentence and the government's sweeping claim of authority to issue it.
— Anthony Romero, Executive Director, American Civil Liberties Union
The quote is not from news about the CIA’s assassination, on the order Barack Obama, of Anwar al-Awlaki. It comes from a report, two months earlier, that the ACLU and the Center for Constitutional Rights were suing for a license to represent al-Awlaki’s father in legal action that might have forced the CIA to “articulate the legal standard under which the government can target Americans for killing without trial, charge, or conviction.”

So it takes a license to provide legal representation in a matter of life and death? After attorneys traveled to Yemen to speak with his father, the Office of Foreign Assets Control happened to get around to making al-Awlaki a “specially designated global terrorist.” This blocked rights organizations from acting in his interest, on behalf of his father, within the judicial branch of the government, unless the executive branch approved of it. Separation of powers is just one of various principles of constitutional law that a roughshod post-9/11 Congress trampled.

Now al-Awlaki is dead (as are several of his associates — when the opportunity to let loose with Hellfire presents itself, the “kill or capture” list grows pragmatically). The CIA apparently will not have to articulate a legal standard. Obama is fortunate in this, not because he’s likely to target more Americans, but because he won’t have to step onto the slippery slope that leads to the question of what standard applies to non-Americans.

I recently heard an audio montage in which senior U.S. officials said of the Predator assassinations, “We’re in a war.” Let’s recall that the government was perfectly clear that Osama bin Laden was a criminal, not a combatant in a literal war, when it obtained from a federal grand jury a 238-count indictment against him. The only thing that distinguished the 9/11 strike, 34 months later, from his previous crimes was that it actually succeeded in terrorizing America. And when the country with the biggest stick on the planet sees itself as impotent to bring to justice legally those who made it piss its collective pants, you can count on fancy rationalization of an illegal response.

Following 9/11, Secretary of Defense Donald Rumsfeld immediately raised the question of whether Saddam Hussein was involved. Then a neoconservative cabal, including Rumsfeld, Vice President Dick Cheney, and Under­secretary of Defense Paul Wolfowitz, opportunistically elaborated a doctrine of attacking nations that sanction terrorist activity, and trumped up a case that Iraq was one of them. The U.S. then warred against two sovereign states with predominantly Islamic populaces, and replaced their governments, in fine neocon form, with non-Islamic democracies. (According to Wolfowitz, the Bush administration knew that overthrowing the government of Iraq violated international law, but believed that it hewed to a higher moral principle.*) To say by extension that the U.S. is warring against transnational crime is absurd.

Due process is of paramount importance in law enforcement. It is how we retain our humanity while dealing with savages. The United States is excusing utterly lawless responses to criminal suspects on foreign soil merely by claiming that they are acts of war. I’d say that the Predator operator amounts to a 21st-Century Rooster Cogburn, tracking suspects in the “Indian Territory,” and blasting them and their associates to smithereens — always in self-defense, or when they are fleeing justice. But Marshall Cogburn worked on behalf of Judge Isaac Parker, and no judicial entity has a role in the Predator assassinations.


* I had huge problems with the moral calculus of the Bush administration prior to the invasion of Iraq. But I had no idea how high a price Iraqis would pay. According to the Iraq Body Count Project, the number of documented deaths of non­combatants in acts of violence during the Iraq War is 103-112 thousand. Precious few Americans know that 26 non­combatants have died violently for each American combatant who has died in Iraq. I don’t know the death toll for the Libyan revolution. But the loss of life in the Arab Spring uprisings generally has been very small in comparison to that which the U.S. precipitated in Iraq.