Who Are the Top One Percent?

Yesterday we looked at the IRS’s most revealing spreadsheet (xls), the one that says that the top one percent of income tax filers pay 40 percent of the federal income tax.

It’s mighty nice of those folks to pony up all that cash, particularly when you consider that they only earn 21.20 percent of the income reported to the IRS. But who are these generous chaps and chapettes?

In short, how much money do you have to make in order to make it into the Top One Percent? What do you think? A million dollars a year? A hundred million? A billion?

Actually not so much. In 2005, the latest year available from the IRS tax return stats, you needed an income of $365,000 to make it into the One Percent Club. That’s up from 2004, but about the same as 2000.

It’s interesting to see how the club entry fee has trended over the years. Back in 1986, you could get into the club with an income slightly under $100,000. Not any more. Not after the Clinton years. That’s when the entry fee for the Top One Percent Club went from $100,000 to $350,000.

What is it about those Democrats? They talk a good line about helping the little guy, but when push comes to shove they’d rather line the pockets of their rich friends.

When George W. Bush became president, he taught those high-rollers a lesson. After he’d finished with them, he’d lowered the entry bar to $250,000. That’s the soft bigotry of low expectations for you.

Of course, Sen. Barack Obama’s (D-IL) wife, Michelle, belongs in the Top One Percent all on her own, with her reported $400,000 job at the University of Chicago.

In other words, the Obamas are part of the problem. They are not paying their fair share. Right, Senator?

All right. Just kidding.

Only the Rich Pay Taxes (update)

The IRS keeps a handy-dandy spreadsheet on the federal income tax. The latest version, for 2005, is here (xls).

The IRS’s spreadsheet shows that “only the rich pay taxes,” well income taxes, anyway.

Stephen Moore, boss of the Club for Growth, writes that he talked to his pal at the Treasury, and the latest results are about to come out. The new numbers will hit a major milestone.

The 2006 numbers will show, for the first time, that the top one percent of federal income tax filers will be paying over 40 percent of federal income tax. The bottom 50 percent pay three percent. In other words, the rich pay the overwhelming share of the income tax.

In 2005, the rich earned 21.20 percent of the income and paid 39.38 percent of the income tax. The bottom 50 percent paid just under four percent of the income tax burden.

As the graph below shows, the share of tax paid by the rich has been going up for the last decade.

The other two lines on the chart show the top income tax rate—which has been going up in Democratic administrations and down in Republican administrations—and the top capital gains rate. If the amount of tax paid by the rich responds to changes in the top marginal tax rate then it is almost certainly responding to the cap. gains rate, which is a tax on profits.

Moore says that two-thirds of the returns of the top one percent are from small businessmen and women.

Many liberals, of course, are outraged that the rich have been getting so much richer. But in a capitalist system like today’s, where startling changes and inventions are changing the market place you will see startling profits, just like the late nineteenth century when Rockefeller amd Carnegie made fabulous fortunes by lowering oil prices by 90 percent and steel prices by two-thirds.

And with the low tax rates on realizing capital gains, the rich are willing to expose their profits to the taxman.

Sen. Barack Obama, of course, wants to change all that. And change, have no doubt, is what he will get.

Vanity of Vanities

Jane Austen’s last complete novel, Persuasion, is about vanity. Principally, it turns around the vanity of the novel heroine’s father, Sir Walter Elliott. This empty vessel (Latin: vanus: empty) is remarkably proud of his title, his lineage, his good looks, and his splendid mansion, Kellynch. He provides a suitable contrast to the heroine, Anne. “[N]one so proper, none so capable, as Anne,” as the hero Captain Wentworth, puts it.

The spectacle of Sen. Barack Obama (D-NY) expatiating on his embarrassment that few Americans speak French, or his proposal that American kids should be forced to do community service remind us about the unseriousness, the emptiness, the vanity of the modern liberal.

Decades ago our liberal friends set upon a serious program, to bring material benefits to the other half. They would provide a safety net to people that had none, and they would lift up the forgotten man to a decent standard of life.

Today it is easy to criticize their program.We can say that their safety net was no safety net, but an an umbilical cord to the welfare state and permanent dependency. We can look at free education today and ask what happened. We can look a Social Security and say: if only we had put Fidelity and Vanguard in charge of this. We can look at the ruins of the working class, now the underclass, and shake our heads at the follies of the liberals.

But fifty, sixty years ago, only a couple of prophets, men like F.A. Hayek, were saying that the welfare state was a Road to Serfdom. No serious person thought that.

But today’s liberals are no longer serious. They want to fiddle with health care. But Americans have basic health care, the kind that saves the lives of mothers and babies. They want women to be able to abort their babies. No serious person could ever do that. They want to carve out benefits for gays and lesbians, who being childless, are not really the most important item on the docket. They are more eager to battle Americans that don’t agree with them than Islamists who want to take over the world.

Anyone can now see that liberals, in the late summer of their power, have become empty, vain, unserious.

We have not experienced, directly, the un-seriousness of liberals in full political power for nearly a generation, not since the un-serious presidency of President Carter. Maybe it’s time for a refresher course.

More Capital Needed at Fannie Mae and Freddie Mac

Yesterday, shares in Fannie Mae, the government-sponsored Federal National Mortgage Assocation were down 16 percent, while shares in the government-sponsored Freddie Mac were down 18 percent. There was concern on the market that both needed “to raise more capital amid larger-then-expected losses.”

So the brilliant managers at the government’s mortgage mills are going to need a bailout too. Only, you can bet that the shareholders of Freddie Mac and Fannie Mae won’t get the haircut that the folks at Bear, Stearns got.

The idea of government-subsidized mortgages was to make housing more affordable to the average American. Something seems to have gone wrong.

Here are the numbers. In 1950, when per-capita income was $2,000, the median house price in the US was $7,350, according to the Census Bureau, or 3.7 times income. Today, with per capita income around $47,000, the median home price is about $220,000, or 4.6 times the median house price.

So with all that subsidy and help from our elected officials, houses cost more than they did half a century ago.

That is what you call progress.

The Trouble With Faith-based Initiatives

Back when President Bush was pushing his idea for faith-based organizations to have access to government monies it seemed like a good idea. But many conservatives warned against it, because whatever the government touches the government controls.

Think the Catholic adoption agency in Massachusetts that decided to get out of the adoption business rather than be forced to accept gays as adoptive parents.

A number of conservatives have had their doubts in the years since. Now Sen. Barack Obama (D-IL) has come out in favor of faith-based initiatives. Writes Rev. Robert Sirica,

Barack Obama has announced that he likes President Bush’s program of public funding for religious charities. In fact, he wants to expand the program.

Yes. Think about it. Think what the liberal government managers will do, and think what the liberal activist groups will do with faith-based initiatives.

The point is, of course, that government is the last place in the world that you would look for giving people a hand up. Government is about power and patronage. It is not about faith, love, and charity. When government helps people it thinks immediately about binding those people into supporting it at the next election.

But votes are all that the liberal politicians care about. Fraser Nelson wrote recently about the people in the welfare ghetto of east Glasgow, Scotland, where 50 percent of the adult population is on “incapacity” benefits and male life expectancy at birth is 54 years:

I once had the job of signing up the good people of Glasgow East to the electoral register — at the time, regarded as an invitation to pay poll tax. Gang graffiti scars the walls, police are virtually unseen. This no-go-zone status is new, and cost billions to achieve. Houses there are in good condition, money is being spent. But it has funded a hideous social experiment, showing what happens when the horizontal ties which bind those within communities to one another are replaced with vertical ties, binding individuals to the welfare state.

Liberals like to talk about the “safety net” afforded by government programs, but the metaphor is misleading. In a safety net, the people are the knots, supported by horizontal ties to work, family, church, and neigborhood. In a welfare state, the only tie is the umbilical cord to the welfare state placenta. Cut that one cord, and you are dead.

Maybe umbilical cord is the wrong metaphor. Maybe the reality is that the vertical tie by which dependents are bound to the welfare state is a rope.

Clark's McCain Put-down

You and I can only guess at the tactical political calculations of presidential campaigns.

So we just shake our heads and wonder at the attempt by Gen. Wesley Clark, an Obama supporter, to brush off Sen. McCain’s military experience as mere by-play. As Jake Tapper quotes,

“He hasn’t held executive responsibility. That large squadron in the Navy that he commanded — that wasn’t a wartime squadron,” said Clark, who did command NATO allied forces during the war in Kosovo.



And the corker: “Well, I don’t think riding in a fighter plane and getting shot down is a qualification to be president,” Clark added.

You have to assume that remarks like that were poll tested by the Obama campaign and run by focus groups. Unless. Unless the Obama campaign is just an amateur operation that just shoots from the hip.

(This is not impossible. The only campaign I served on was a very amateur operation, as it was bound to be when it ran mostly on volunteers.)

But let us assume there are adults at the Obama campaign. They must think that they have to take down McCain’s advantage as a combat veteran with actual service in the military. It is true, of course, that service in the military does not immediately transfer to “national security” experience. But we know that McCain has made national security a key concern as a United States Senator. You are really taking a big risk to try impeach his credentials as a serious actor on national security.

So I reckon that the Obama folks reckon they are toast unless they can take McCain out on national security. That means that they are looking at polls and focus group results with negative results on Obama’d electability that you and I can only guess at.

But hey, with the help of the mainstream media, maybe they can do it!

Or maybe, given the fact of evil right-wing swift-boating extremist bloggers, they can’t.

New Hope for Global Warming Deniers

There are some of us, and we are few, who reflexively recoil from the latest liberal enthusiasm.

(And why is it that every liberal enthusiasm involves a dip into your pocketbook?)

So we grab at hopes that the liberals are wrong—again.

Last week there was a straw to grasp for us global warming deniers. A couple of astsro-physicists published a paper on sunspots and the solar cycle.

As reported by Andrew Bolt the phsysicts are predicting that the sun may turn quiet with very few sunspots in the next 20-30 years. Some scientists believe that global temperatures typically dip by 1 to 2 degrees during these episodes.

The theory is that the convection currents in the sun are driven by the rotation of the Jovian planets, Jupiter and Saturn. They represent the biggest mass in the solar system after the Sun, and cause the sun to “wobble” around the center of the Solar System.

If this is true, and if Cycle 24 is really a quiet cycle, and if the climate cools by one or two degrees... Well, it could dent the current global warming “consensus.”

Author Ian Wilson comments on his paper.

It supports the contention that the level of activity on the Sun will significantly diminish sometime in the next decade and remain low for about 20 - 30 years. On each occasion that the Sun has done this in the past the World’s mean temperature has dropped by ~ 1 - 2 C.

Well, it means new hope for global warming deniers.

But go ahead, AlGore. You can crank up the thermostat in your energy-guzzling house if things get a little chilly. We won’t mind.