Someone try to justify this.

We don't have the correct regulations in place. Instead of worrying so much about licensing a little girl who wants to sell lemonade, we should worry more about bringing honesty and decency back to advertising methods. We should worry more about letting companies offshore their jobs when we need those jobs here, and then sell those same products back here, or even do business in America if they don't pay taxes on everything they sell which isn't taxable in the offshore country. Stuff like that. You can't blame these people for making money where they LEGALLY can, but some things should not be legal.

 

I don't care about the %s, I care about whether they got that money fair and square. If so, I don't care how much they make.

Other than jealousy, I don't see any reason why anyone else should care either.

Or rather, let me pose it this way:

If people really didn't want those few people making so much money....why do you keep paying them?

 

I here you. 1% apologists don't care how much more of the nation's income and wealth the 1% get, because more is never enough.

But they are happy to support laws that help the 1% get even more.

Other than greed, I don't see why the 1% would care.

Folks have to work to survive.

 

Justify it? I think explain is more like it. What is unjust about having some people earn more than others? I think that is an incredibly horrible way to look at things, because it misses the underlying point that is cause for celebration - real wages, for every group have increased. The fact that the standard of living for the richest increases faster is of no real concern, so long as the standard of living - the quality of living - is not decreasing for the poor. Apart from land reforms, the rich getting richer at a faster rate than the poor is a historical norm. Why? Well because industrialization requires the concentration of wealth, and so there is a natural pattern where industrialization has led to the wealthy having a greater share of the wealth, but the key is that it has enhanced the lives of all involved (talking big picture here).

There are actually cases of the lower classes "not working hard enough", but where that is actually the case it is usually because of prohibitive government programs, where their compensation after government benefits would decrease if they earned more at their job. This kind of limitation is generally what people refer to when they talk about 'systematic dependence' or anything of the sort.

That's why a lot of people advocate things like a phased out benefit. Suppose (these are made up figures) that you earn 37k/yr, and the upcoming promotion would cause you to go up to 42k/yr and lose 10k in benefits your family enjoys where the threshold is 40k, you would instead only be required to pay a fifth of those benefits over the threshold (0.4k) out of pocket. I personally would suggest that this over-threshold adjustment would be paid by the individual directly into the program, and would be non-taxable income (so for government purposes, your taxable income is not 42k, but 41.6k before any other adjustments are made).

Another such proposal, similar to what exists in Finland, is that everyone - including the rich - get a government benefit at a subsistence level, so that there is no actual need for an unemployment benefit, but there is also zero disincentive to earn more.

 

Why does it matter if a couple hundred people have a ridiculous amount of money? The fact that they have it doesn't hurt anybody (assuming they didn't do anything illegal to get it).

Greed is exactly why they care; the difference is that so long as what they do is legal, their greed doesn't matter. Jealousy, on the other hand, leads to people demanding some of the rich people's money just because, even though they didn't earn it.

 

To answer the OP question. Unparalleled historical technological explosion in computers and telecomm, etc. leads to more concentration of income, and we all get immense gains in QOL as a result. The paradigm shift from the corporate form of entity to passthrough entities (mainly LLCs) as the primary small business form leads to less tax at the corporate level and more at the individual 1040 level. Taxcutter is also absolutely correct on anticompetitive graft-laden regulations chilling competition that leads to increased wages for undifferentiated labor. That and an increasingly competitive world market for unskilled labor (you know, those people all over the world who are happy to have the jobs our unions have chased out) are factors that caught no one unaware, or at least no reasonable people. I'm all for abolishing the regressive payroll taxes of SS and medicare right now, 15 years from retirement. Let's do that yesterday and put 15% more in everyone's pocket annually!

Oh and your "millionaire tax bracket" graph is highly flawed as it doesn't include the effects of the pre 1986 shelters... basically no one paid those high rates.

 

1) They got it by leveraging off the labor of others.
2) They proportionately do not spend it. Rich folks save a lot more and stick a lot of it in their offshore accounts, where it does little for the economy. Middle class folks typical spend most of their money, where it goes to create demand, more production, and more jobs.

Their greed does matter. It hurts the middle class and the economy.

 

You know what a passthrough entity is right? know how an LLC works right?

 

Except there's no proof that 'trickle down' economics caused the rich to have a greater share. That is usually based on little more than a correlation argument, but that same correlation is greater argument for the idea that a higher national debt leads to greater inequality than it is an argument for the idea that tax cuts leads to greater inequality.

 

That bubble got its start waaaay back before the 2000s and was not due to any particular political party but the govt mainlining crack into the economy for decades until the addict just keeled over. Don't tell me you believe the "bush did it, wall street did it" canard? Enjoy the bliss.

 

It did.

It was a combination of technological revolution and the rightward shift of America simultaneously. Rich have never been in a more favorable position from a policy standpoint.

 

1. If the worker agreed to work for them and the employer isn't doing anything illegal, nothing wrong is happening here. The workers get paid, don't they?
2. So? It's their money, they can do what they want.

How exactly do they hurt the middle class? And don't pull the % of income stats because that implies middle class people are making less, which they aren't.
And if they're making that much money in a legal manner, in all likelihood (with a few exceptions, like the subprime mortgage securities that caused the Great Recession) they're benefiting the economy, not hurting it. For instance, how can Bill Gates make that much money off of Microsoft software and hurt the economy? That would imply that Microsoft products hurt the economy, when in fact they do the exact opposite.

 

There was no bubble until the early 2000s.

 

What a great technological boon computers and telecomm have been, right? Oh, you think just random undifferentiated labor were the "people who did that?" Bwahaha, priceless.

 

Yes it does. That is where you are wrong.

It isn't that hard to grasp folks.

We spend every other thread (*)(*)(*)(*)(*)ing about stagnant economy. It is stagnant because there is too much wealth concentrated at the top. The consumers don't have money to spend.

 

I'd say in the mid to late 1800s when wealth was being distributed upward, much as it is now.

 

There's all kinds of tricks they can use.

 

Sorry, that would entail more effort than cut-pasting the same flawed graphs over and over. Not gonna happen.

 

Trickle down' was specifically designed to make the rich richer. Cut their taxes, raise FICA taxes on the middle class, gut unions power that would leverage higher wages, trim back application of OT laws, hold the MW wage down, outsource jobs, all that trickle down stuff would have the designed effect of making the rich richer.

And it had the effect it was designed to do. Unless you take the position that the inequality growth that started at just the same time "trickle down" policies were passed was just a big coincidence.

 

I'll take that as a "no" you don't understand LLCs or passthrough entities. LLCs are simply a flexible form of business entity that allows everyone from your barber to the local contractor to convert what would have been corporate income in the old C Corp regime into personal income on their 1040. There is absolutely nothing shady or unscrupulous about it, taxes are paid just the same, it just explains lots of the decline in corporate tax as a % of overall govt tax revenue over the last decades.

 

Whoever got cable modem access down below the $100 a month I paid in the past, or made my bluetooth phone, can have 1000 gold encrusted yachts for all I care, so long as they keep doing what they are doing... making my life better.

 

It didn't. Tax cuts aren't anything new - Kennedy had his tax cuts, which were essentially the exact same thing as the Bush tax cuts. They were a cut across the board of 20%. There was no such explosion in their share of income, it was essentially stagnant. In fact, just a few years later, the 1%'s share of income dropped. Care to explain that?

just look for yourself

There was a bubble forming before 2000, the bubble just didn't reach its peak (at which point it popped) until after 2000.

 

Notice that deep bellied "US top 1% income share" just happens to have its peaks in 1% income during the automobile/electricity/oil/steel boom and then later in the computer telecomm boom starting in the 70-80s. Ever stop to think that when a few people get stinky inky rich in this country that all our lives get better as a result?

 

1. Extend that graph back a few more decades to get a better picture. 2. The bubble was primarily a "credit" and "credit risk" bubble, not a pricing bubble. The actual housing prices were of limited relevance, a final grand mal symptom as opposed to a cause. 3. No convenient cut and paste graph tells the story of the housing crash that led to the recession of 08, there were multiple factors that can't be graphed, most of which entailed government malfeasance going back 80 years. 3. If you really want to debate the housing bubble with someone who has worked in that field for nearly 30 years, we can do that. Or you can take my word for it like I do my contractor when he tells me why my floor is not level.

 

All our lives didn't get better. Virtually all the economic benefit generated over the past 30 years has gone to the richest. Middle class wages have been basically stagnant.

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I didn't say anything about why it happened. I posted the graph to rebut your claim that the bubble existed waaaaaay before 2000.