Even dividing the numbers into quintiles tends to mask the extreme benefit to the wealth. Nearly all the benefit -- surging incomes, mass concentration of wealth -- as been in the top 1%. The remaining 19% of the top quintile have done all right, but not spectacular.

You know the classic example: put twenty homeless people in a room with Bill Gates, and the average wealth in the room is "billionaire." Well, the same principle applies with the top quintile. Put nineteen reasonably well-off but not rich professionals together with one multi-billionaire hedge fund manager, average their numbers, and the nineteen professionals find themselves lumped into a group that, on paper, is doing WAY better than any of them as individuals.

This isn't a question of quintiles. It's the top 1% that're making out like bandits.

Dave Porter, Dave Porter,

There are those of us Democrats who believe restricting immigration and opting for fair trade over free trade are worthwhile. We also believe more progressive income tax brackets and fewer deductions for fat cats are the way to go.

We are engaged in class warfare. The working people of this country did not start that war. It will take more than one weapon to win it.

Do any of you think that the influx of illegals, working below prevailing market wages, has helped keep a lid on working class wages?

It appears that tightening border security (keeping the flow of illegal workers to a minimum) would produce more competition on the part of employers to hire workers. This means the'd have to pay more to employees.

Just a thought.

DanS,

We don't need militarized borders. We need fined and imprisoned illegal employers.

"Republicans, and a good chunk of the public, currently block raising taxes."

This is because of the thinking 'whats mine is mine, and what's yours is mine, too'. It's very selfish.

"We are engaged in class warfare. The working people of this country did not start that war."

It started because of selfish and self-ceneterd people who think short term instead of long term (see Measure 5). More money does not mean happiness in the long run, but it destroys in the short term.

Tom,

I'm all in favor of fining employers. You and I have no disagreement there.

However, we still have a problem with illegal immigration and jobs. If employers hire illegals "off the books" then there won't be anything to fine. Also, we currently make foreigners coming through airports pass Customs, are you not in favor of that? Our airports are secured (customs officers and security at airports do have access to weapons to enforce the law, if need be).

well, and the other issue is the black market available for fake papers. undocumented workers can get their hands on the sort of documentation they need to get jobs, keeping the employers legally protected. it's just a matter of them paying for the papers. (and not collecting on the social security that's withheld from their paychecks, but that's another issue.

My suggestions to restore some justice to the system:

1) Remove the limit on FICA taxes which currently end at some point in the second $100k an individual earns through labor (I don't remember what the number is since I've never been remotely close to earning it, though I'm self-employed and pay the full 15.3% to the IRS directly.) Social Security is a basically sound system (and would be better if they didn't blow the SS surplus on wars and such) but the tax is incredibly regressive...15.3% of the first dollar you earn and 0% of the 200,000th.

2) Tax unearned (dividend, interest, capital gains, etc.) with a tax equivalent to FICA for unearned incomes over, say, $50,000. There's still plenty of headroom to encourage any of the bottom 80% to save and invest, but such a tax will hit those who live ONLY by unearned (in the hourly wages sense) income.

By the way when the right talks about tax cuts they NEVER mention the FICA flat-tax on the working poor.

Again, we cannot isolated ourselves from the global economy for any lasting benefit to ourselves. We need more young and /or skilled workers to come to our country to keep it competitive and to keep our Social Security system financial viable. Of course, we need to get them legally and find a way to better control our borders. This may mean that we let tens of millions cross our borders legally each yet, or that, over the longer term, we move our borders south (for examples, see the Tom Barnett Equire article "The Five Next States" here).

I don't think a progressive tax system can curb the growing income inequality. While the tax system justifiably redistributes some of the wealth, it doesn't address the root problems that are causing the inequality, so we'll always be playing catch-up.

What are the root problems that cause income inequality? I don't honestly know. It could be the steady decline in membership for organized labor -- but it was never that high to begin with. It could be the increasing cost of higher education -- except that more people are graduating from college than ever before, despite the high cost. It could be that our schools are failing to prepare people for the new high-tech, white collar world -- or it could just be that we're in a major transition period from a post-industrial economy to something else.

I think one major factor, though, is cultural/ethical. The people at the top have always been able to control the financial resources. But it used to be that the CEO of a company earned maybe 20 times what the lowest paid employee makes -- and he didn't want to earn more, because it didn't seem right to him or his board of directors. Now, he makes 100 times more than the lowest paid employee and feels totally justified. What happened? The culture changed so that it became okay to do so. The CEOs began to believe that they were actually worth not just $500,000 a year, but $5 million. Or $10 million. Or $50 million!

It's absurd, but we've gone through these cycles before, and the pendulum will swing back. But it would help if we had a cultural pushback against the excess, and that's something progressives can do something about by nominating John Edwards for President, because he speaks powerfully on the topic of income inequality and poverty.

When a star professional athlete signs a nine-figure multi-year contract, there are dozens of other stars who say, "Hey, I'm at least as good as that guy, so I deserve at least as much, if not more" If fact, it seems as if the record some athletes are shooting for is highest salary.

Corporate CEO's are behaving the same way. They are measuring their comparative worth in the business world by how much they can extort in salary and benefits from their boards of directors. This escalation in salaries is mostly a bunch of ego trips.

By now, however, this group has become so entrenched that there is an elite community in which each family owns several homes in prestigious locations, flies to them in private jets, and has every whim catered to by armies of personal assistants, caterers, hairdressers, you name it...And the rest of the population of the world just doesn't count for anything.

My old boss Jim Weaver, former U.S. Rep. from the 4th District, once proposed an annual maxiumum wage, to go along with the minimum wage. Go above it and every extra dollar is taxed. This didn't get very far, and this was in the 70s.

Yeah, the pendulum will swing back, and it's going to hit a bunch of us right on the head when it does, as we'll probably need a major recession to re-align things.

Okay, back on topic after that digression. Here's something to ponder:

According to conventional wisdom, lower taxes are supposed to make people work harder and earn more money. But why?

If you are taxed at, say, 20%, then you get to keep 80% of what you make. If you make $100,000, you get to keep $80,000 and if you make $200,000, you keep $160,000 (this being a totally oversimplified tax code).

So what if you are taxed at 50%, instead. You keep only $50,000, instead of $80,000. But you want or need things that can only come with more discretionary income. It seems about the only way to get that extra income is to work harder.

Thus, it would appear that instead of cutting taxes on the rich, we should have been raising taxes on them all along.

Historically the middle class has prospered when the trades prospered, wage increases have never been driven top / down, rather they are driven bottom / up. Tinkle down economics flies in the face of economic history. what does not fly in economic history's face is the severe social/economic consequences of disparity of wealth.

We don't need militarized borders. We need fined and imprisoned illegal employers.

We do too need militarized borders. To keep the Californians out.

Jeff,

So what is the problem? I don't care if A-Rod gets $25M a year to play baseball, why do you? It doesn't bother me that Bill Gates has a billion bucks, why does that bother you? You seem to think that Bill and A-Rod owe you something. Why is that? What did you do that gives you the moral right to take away their money? Still have unresolved issues with jealousy left over from childhood or something? Can't stand to see someone else with more toys than you have so you want to use the police power of the State to take away the rich kids toys? As far as I know A-Rod, Bill Gates, Warren Buffet, etc all play according to the rules and pay their taxes. The upper few percent already pay about 65% of all taxes collected and you're crying for more? What is so fair about that? Looks to me like you're a bully who wants to steal money that isn't yours just because you're in the majority.

I think the important part of the original post was that the PROMISE of trickle down/Laffer curve hasn't in any way shape or form been fulfilled.

There hasn't been a tide to lift all boats. There hasn't been an increase in revenue to balance our budget (and when GHW Bush and Clinton did raise taxes and start to reverse Reagan's tax cuts and the budget started to come into balance shrub reversed all the gains).

As the great Sen. Pat Schroeder said....we've been sold on a diet of hot fudge sundaes and told we can lose weight. Well, We're stepping on the scale now. Please explain to me why I weigh the same?

And, to make things worse for the middle class The federal deficit, and the SS deficit, are going to be paid by them through tax increases in among other things, the payroll tax. Which even progressives are unwisely pushing.

Instead of lifting the cap on wages subject to payroll tax, we should impose a 1-2% (or whatever it would take) special tax assessment on all income, earned and unearned. That's much more equitable since the proposed increase in the SS tax isn't tied to increased benefits for the upper income wage earners, its to pay off the money the treasury "borrowed" from our SS trust fund over the last 25 years.

Thats money that should have come from our general taxes. So why on earth would you propose that it be paid by wage earners only? If progressives actually buy into that they will have converted what should have been paid for by income tax into a payroll tax. You've just shifted a huge tax liability from the wealthy to the workers. And made in the most regressive way to boot.

I think the important part of the original post was that the PROMISE of trickle down/Laffer curve hasn't in any way shape or form been fulfilled.

There hasn't been a tide to lift all boats. There hasn't been an increase in revenue to balance our budget (and when GHW Bush and Clinton did raise taxes and start to reverse Reagan's tax cuts and the budget started to come into balance shrub reversed all the gains).

As the great Sen. Pat Schroeder said....we've been sold on a diet of hot fudge sundaes and told we can lose weight. Well, We're stepping on the scale now. Please explain to me why I weigh the same?

And, to make things worse for the middle class The federal deficit, and the SS deficit, are going to be paid by them through tax increases in among other things, the payroll tax. Which even progressives are unwisely pushing.

Instead of lifting the cap on wages subject to payroll tax, we should impose a 1-2% (or whatever it would take) special tax assessment on all income, earned and unearned. That's much more equitable since the proposed increase in the SS tax isn't tied to increased benefits for the upper income wage earners, its to pay off the money the treasury "borrowed" from our SS trust fund over the last 25 years.

Thats money that should have come from our general taxes. So why on earth would you propose that it be paid by wage earners only? If progressives actually buy into that they will have converted what should have been paid for by income tax into a payroll tax. You've just shifted a huge tax liability from the wealthy to the workers. And made in the most regressive way to boot.

let me point out the very big difference between Gates and A-Rod. Gates is an owner, A-Rod a worker.

Jeff -- I'm struggling to figure out what you meant by this, other than the obvious point that Alex Rodriguez must negotiate for his pay, whereas Bill Gates doesn't have to. But in terms of the ultra-rich and how much they should pay in taxes, I don't see a difference between A-Rod and a corporate CEO making the same pay (about $20 million a year).

Andy writes: You seem to think that Bill and A-Rod owe you something. Why is that? What did you do that gives you the moral right to take away their money?

I know you're probably not interested in a real discussion about this, but here goes anyway: It seems that you're ignoring the entire concept of the social contract. Everyone in society has a responsibility to pay for that social contract, because everyone benefits from the fact that we don't live in a state of nature. So it's not that I have a moral right to their money, it's that WE have a moral right to it. And we enforce that right through our democratic government. Everyone in our society, including you and Gates and A-Rod, have the freedom to petition our government to lower (or raise) taxes -- but you must convince your fellow citizens that your idea has value. So far, your extreme position has failed to sway many people.

As for how much the rich, however defined, should pay in taxes, that's a policy issue up for debate. President Bush and the GOP believed they were paying too much in the 90s, and he gave them a massive tax break. I assume you agree with that decision. But you ask why they should pay more. . . I ask why they should pay less than they did 7 years ago? Is there something magical about today's tax rates that didn't exist in 2000? Or do you subscribe to the absurd theory that all tax cuts are good tax cuts, until the tax rate hits zero?

darrelplant;

my defintion, somewhat tongue in cheek, of the middle class is in general....

people who work for their money, not people whose money works for them...