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<DIV style="FONT: 10pt arial">----- Original Message -----
<DIV style="BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A
title=astridjb@comcast.net href="mailto:astridjb@comcast.net">Astrid Berkson</A>
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<DIV><B>To:</B> <A title=lp53forum@lpths.org
href="mailto:lp53forum@lpths.org">lp53forum@lpths.org</A> ; <A
title=lp53forum@lpths.org
href="mailto:lp53forum@lpths.org">lp53forum@lpths.org</A> </DIV>
<DIV><B>Sent:</B> Monday, March 26, 2012 7:28 AM</DIV>
<DIV><B>Subject:</B> [CentralILJwJ] 1% get 93%of gains</DIV></DIV>
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<DIV class=left><A href="http://www.nytimes.com/"><IMG border=0 hspace=0
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<DIV class=timestamp>March 25, 2012</DIV>
<H1><NYT_HEADLINE type=" " version="1.0">The Rich Get Even
Richer</NYT_HEADLINE></H1><NYT_BYLINE><SPAN itemtype="http://schema.org/Person"
itemscope="" itemprop="creator">
<H6 class=byline itemprop="name">By STEVEN
RATTNER</H6></SPAN></NYT_BYLINE><NYT_TEXT>
<DIV id=articleBody><NYT_CORRECTION_TOP></NYT_CORRECTION_TOP>
<P itemprop="articleBody">NEW statistics show an ever-more-startling divergence
between the fortunes of the wealthy and everybody else — and the desperate need
to address this wrenching problem. Even in a country that sometimes seems inured
to <A class=meta-classifier title="More articles about income inequality."
href="http://topics.nytimes.com/top/reference/timestopics/subjects/i/income/income_inequality/index.html?inline=nyt-classifier">income
inequality</A>, these takeaways are truly stunning. </P>
<P itemprop="articleBody">In 2010, as the nation continued to recover from the
<A class=meta-classifier title="More articles about the recession."
href="http://topics.nytimes.com/top/reference/timestopics/subjects/r/recession_and_depression/index.html?inline=nyt-classifier">recession</A>,
a dizzying 93 percent of the additional income created in the country that year,
compared to 2009 — $288 billion — went to the top 1 percent of taxpayers, those
with at least $352,000 in income. That delivered an average single-year pay
increase of 11.6 percent to each of these households. </P>
<P itemprop="articleBody">Still more astonishing was the extent to which the
super rich got rich faster than the merely rich. In 2010, 37 percent of
these additional earnings went to just the top 0.01 percent, a teaspoon-size
collection of about 15,000 households with average incomes of $23.8 million.
These fortunate few saw their incomes rise by 21.5 percent. </P>
<P itemprop="articleBody">The bottom 99 percent received a microscopic $80
increase in pay per person in 2010, after adjusting for inflation. The top 1
percent, whose average income is $1,019,089, had an 11.6 percent increase in
income. </P>
<P itemprop="articleBody">This new data, derived by the French economists Thomas
Piketty and Emmanuel Saez from American tax returns, also suggests that those at
the top were more likely to earn than inherit their riches. That’s not
completely surprising: the rapid growth of new American industries — from
technology to financial services — has increased the need for highly educated
and skilled workers. At the same time, old industries like manufacturing are
employing fewer blue-collar workers. </P>
<P itemprop="articleBody">The result? Pay for college graduates has risen by
15.7 percent over the past 32 years (after adjustment for inflation) while the
income of a worker without a high school diploma has plummeted by 25.7 percent
over the same period. </P>
<P itemprop="articleBody">Government has also played a role, particularly the
George W. Bush tax cuts, which, among other things, gave the wealthy a 15
percent tax on capital gains and dividends. That’s the provision that caused
Warren E. Buffett’s secretary to have a higher tax rate than he does. </P>
<P itemprop="articleBody">As a result, the top 1 percent has done progressively
better in each economic recovery of the past two decades. In the Clinton era
expansion, 45 percent of the total income gains went to the top 1 percent; in
the Bush recovery, the figure was 65 percent; now it is 93 percent. </P>
<P itemprop="articleBody">Just as the causes of the growing inequality are
becoming better known, so have the contours of solving the problem: better
education and training, a fairer tax system, more aid programs for the
disadvantaged to encourage the social mobility needed for them escape the bottom
rung, and so on. </P>
<P itemprop="articleBody">Government, of course, can’t fully address some of the
challenges, like globalization, but it can help. </P>
<P itemprop="articleBody">By the end of the year, deadlines built into several
pieces of complex legislation will force a gridlocked Congress’s hand. Most
significantly, all of the <A class=meta-classifier
title="More articles about Bush Tax Cuts."
href="http://topics.nytimes.com/top/reference/timestopics/subjects/t/taxation/bush_tax_cuts/index.html?inline=nyt-classifier">Bush
tax cuts</A> will expire. If Congress does not act, tax rates will return to the
higher, pre-2000, Clinton-era levels. In addition, $1.2 trillion of automatic
spending cuts that were set in motion by the failure of the last attempt at a
deficit reduction deal will take effect. </P>
<P itemprop="articleBody">So far, the prospects for progress are at best
worrisome, at worst terrifying. Earlier this week, House Republicans unveiled an
unsavory stew of highly regressive tax cuts, large but unspecified reductions in
discretionary spending (a category that importantly includes education,
infrastructure and research and development), and an evisceration of programs
devoted to lifting those at the bottom, including unemployment insurance, food
stamps, earned income tax credits and many more. </P>
<P itemprop="articleBody">Policies of this sort would exacerbate the very
problem of income inequality that most needs fixing. Next week’s package from
House Democrats will almost certainly be more appealing. And to his credit,
President Obama has spoken eloquently about the need to address this problem.
But with Democrats in the minority in the House and an election looming, passage
is unlikely. </P>
<P itemprop="articleBody">The only way to redress the income imbalance is by
implementing policies that are oriented toward reversing the forces that caused
it. That means letting the Bush tax cuts expire for the wealthy and adding money
to some of the programs that House Republicans seek to cut. Allowing this
disparity to continue is both bad economic policy and bad social policy. We owe
those at the bottom a fairer shot at moving up. </P><NYT_AUTHOR_ID>
<DIV class=authorIdentification>
<P><A href="http://stevenrattner.com/">Steven Rattner</A> is a contributing
writer for Op-Ed and a longtime Wall Street executive.
</P></DIV></NYT_AUTHOR_ID><NYT_CORRECTION_BOTTOM>
<DIV
class=articleCorrection></DIV></NYT_CORRECTION_BOTTOM><NYT_UPDATE_BOTTOM></NYT_UPDATE_BOTTOM></DIV></NYT_TEXT><BR><PRE class=moz-signature cols="72">--
Life is like a roll of toilet paper.
The closer it gets to the end, the faster it goes.
</PRE></BODY></HTML>