Are the Poor Getting Poorer?

Are the Poor Getting Poorer?


One often heard contemporary economic myth
is that the rich are getting richer and the poor are getting poorer. Like any myth there
is a nugget of truth to this. For example, if we look at the data, the top 20 percent
of income earners today do have a larger share of national income than they did in the past,
and the bottom 20 percent of income earners do have a smaller share of national income
than they had in the past. There’s two problems with that data. First
of all, that data doesn’t tell us anything about the absolute condition of the poor:
Just because one has a smaller share of income doesn’t mean that one is absolutely poor.
So, for example, it could be the case that even though poor Americans have a smaller
share of national income, their absolute income is higher. If I asked you, would you rather
have a sixth of a pizza or a ninth of a pizza, your answer might depend on how big the pizza
is. And having one-ninth of a pizza might be better if the pizza was much larger than
the one of which you’d have one-sixth. The real income of poor Americans today is
higher than it used to be even though their share of total income is somewhat lower. But
all this misses the more fundamental point. The bigger problem is that data is snapshot
data that compares wealthy people in one year with wealthy people in years before, poor
people in one year with poor people in years before. What it doesn’t take into account is the
movement in individual households through time. If we could track individual households,
we might be able to know what happens to poor people in, say, five years or ten years or
fifteen years. And in fact, we do have that data. One set of data shows that between 1979
and 1988, 86 percent of households that were poor in 1979, were no longer poor in 1988.
A second set of data from the University of Michigan shows that of households that were
poor in 1975, over 95 percent of them were no longer poor by 1991. One of the most important things to understand
when we talk about the rich getting richer and the poor getting poorer is this idea of
income mobility. The reality is, for most Americans, that they start off poor and they
slowly become richer over time. And in fact, if we look at that data comparing 1975 and
1991, what we find is that the average income gain for rich households over that period
was just about $4,000, but the average gain for poor households over that period: $28,000. So what really happened between 1975 and 1991
is that the rich got richer, but the poor got richer a lot faster than the rich did.
So whenever we talk about rich and poor, we have to take account of this issue of income
mobility. So how can it be that most Americans are getting richer when we know that there
are still plenty of poor people out there? Well the fact is that one of the things that
happens over time is who comprises the income distribution changes. Immigrants, young people
entering the labor force come into that income distribution at low levels of income. They
become the new poor while the old poor slowly move their way up. So even though a first glance at the data
may make it seem like the rich are getting richer and the poor are getting poorer, the
reality of the United States in the early 21st century is that everybody’s getting
richer, rich and poor alike. And the idea that the rich are getting richer and the poor
are getting poorer is largely a statistical artifact and mostly a myth.

100 Comments on "Are the Poor Getting Poorer?"


  1. Fear not ladies and gentlemen, I have made a response video to the lies and nonsense that is this video, I try to show that most of what this "gentleman" is saying here is nonsense and rotten nonsense at that!
    Check it out – "Are The Poor Getting Poorer?"
    Come on down to the carnival and learn something new!

    Reply

  2. I guess no one in China or Russia should complain at all about income inequality. According to this theory that any growth at the national level means that people are 'getting richer'. What is concerning to a lot of economists is that the rate at which the rich is growing vs the rate at which the poor is growing. The share of the pie isn't getting smaller because population is getting larger, the math doesn't add up. The share is getting smaller because the richest percentile is getting larger. This actually leads to lower growth and has historically preceded economic catastrophes.

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  3. And this guy is a professor?? How can you compare a pizza with income?? A piece of a pizza is as big as it is, no matter how large the uncut pizza is, or how many pieces it is cut into. Income is relative to prices. If real estate and general prices raises more than your salary you will get poorer even if your salary doubles. When income inequality increases, the rich makes prices higher for everybody else. I am norwegian and we have an oil city named Stavanger. Three years ago there were big problems because they couldnt get teachers and nurses to work there. Why? They couldnt afford living there because the oil incomes/capital pushed the prices skyhigh. Thats what happens when inequality gets too large.

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  4. No, he's not trying to spin things when he uses data from 1997 when this was produced in 2011. This whole channel is a Libertarian viewpoint. So much for fair reasonable points of view. Libertarianism = GREED

    Reply

  5. i want what this guy is smoking, dude are you serious? i could go into a rant on why EVERYTHING you said is stupid and false but you do a great job yourself, congrats

    Reply

  6. Here the prove that free market is the only good market.
    Real freedom!

    Draft or Free Market?

    Reply

  7. Capitalism makes the rich richer and the poor poorer is classic Marxism, which is not only economically fallacious, it's economically illiterate.

    Reply

  8. the people who want to work will work and make a living for themselves and the people who are lazy will not. end of story.

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  9. I for one would like to see a follow-up video that shows how much IQ affects income mobility over time.

    The data for this should be in the National Longitudinal Survey of Youth. 

    Reply

  10. Talking as if he is smart, but yet a 12 year old knows more. He is the absolute symbolic of stupidity. Fucking hell man. I can't believe this crap.

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  11. Dude, just accept that you're pretty much bald. Those little tufts of hair at the side make you look like an owl.

    [Meaningful comment pending…]

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  12. This income mobility is a parasite…..it requires constant large growth to sustain it as there will always need to be the poor/working class to replace the ones moving up. And thus the cause of immigration.

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  13. This dude are talking about the 21. century, but uses statistics from the 20. century and doesn't account for inflation.. He might have a point, but that point was valid 23 years ago (since that's his most recent data). This is just poorly made propaganda for dumb people.

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  14. Wow. Just, wow. I think my favorite part of the sheer amount of feces pouring out of this man's mouth is the pie chart at the beginning. Basically he's saying that it is okay to get less of a share as long as the entire 'pizza' gets bigger. So does that mean that as this bullshit pastel gets bigger and bigger then it's okay for the poor to get less and less of a share? Man if this scheisse pastete were to ever become static or if it were to shrink. Well I'd hate to be fed that piece of merde tarte.

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  15. makes perfect sense…that said dont bother trying to show it to libtards….they have decided what they are going to believe, and facts wont change any minds. sad isnt it?

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  16. There are some SERIOUS problems with the arguments made in this video, much of which have already been thoroughly demolished by others here, so I won't retread those.  But the main issue is that he is purposefully ignoring Federal Reserve and Census Bureau data since the early 2000s, which shows that not only is the average poor family in America much poorer (and going into more debt), but even the MEDIAN family is poorer as well, with much of the income and wealth gains going to the top one percent during the last decade.

    Another major statisitcal fallacy is his "average salaries" graph at about 2:10.  First, it ignores the other income sources of the very rich (most of which derives from sources other than salaries).  He claims that the wealthiest 20% saw their incomes increase $4,354 from 1975 to 1991, an 8.6% increase, which sounds about correct in comparison with the other statistics on the issue.

    But secondly, then he claims that from 1975 to 1991, the average salary of the poorest 20% went from $1,263 to $29,008, which is a near 3,000% increase in sixteen years! And this, of course, was during a time when wages were FALLING in real terms for most poor and working class Americans (and yes, even when you include benefits and "total compensation"), and when economic inequality was increasing (since 1968, America's most "egalitarian" year, as measured by the Gini coefficient).

    And even when he's making the argument that some poor people are individually and eventually becoming wealthy during their own personal lives (as if that doesn't happen in high-tax social democratic countries as well, where income mobility is even stronger), it's completely ignoring the "new poor," if you will, and those new workers in low wage jobs with few benefits.  He is conveniently disregarding the fact that income mobility works in BOTH directions, and that increasing inequality and declines in wealth for the poor (whomever they are or whenever), is just simple reality.

    This video is exceptionally misleading and dishonest.  Not that I expect so-called "libertarian" organizations like Learn Liberty, funded by the oil inudstry and the Koch brothers, to be intellectually truthful, but this is just getting ridiculous. 

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  17. What would make this otherwise informative video relevant are data past 1991. It would be folly to suggest that the trends observed from 1975 to 1991 are immutable. They have changed in large part to Congressional policies

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  18. I'm instantly sceptical when you have to go back that far to porve your case, so can i assume you argument was correct 10-20 years ago, but isn't valid anymore?

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  19. Oh hell you people are stupid. For those that say this is BS because the states are old,maybe learn to read and click on the link for new stats.

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  20. Why is your latest data set for income mobility stops in 1991?  Maybe because the more recent trends don't show what you want them to.

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  21. Do these statistics consider the sever lack of job stability and costs now expected to be covered by individuals rather than employers? Things like job growth being in part-time or contract work which do not include benefits? When the number of Americans living below the poverty line has increased I do not understand how Americans are becoming richer. I am trying to keep an open mind and stay balanced when I teach economic theories to my students.

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  22. everybody has the chance to be rich. were just greedy. i'm 20 years old but unlike my fellow peers my age, I don't go to the mall and spend hundred of dollars in clothes.
    I don't buy the new Jordan's , Lebron's, ect….. (sometimes $200+)
    I don't buy a new car after i payed one off and get in another debt.

    (If I pay off a car and its still runs good and now I only pay the $200 insurance why get in debt again?…. pay another down payment and pay 200 to 300 a month extra including the insurance, wait what If i get a ticket one day? what if something breaks?)

    I don't buy the iPhone 6 for 700 dollars to fit in

    (really who pays more that $200 for a phone)

    I have saved my money since my first job and i'm still saving.

    the key to get rich is to save period.

    all these people who live in poverty strict-ed situations always complain about oppression, racism, segregation……… but for all the people my age, when you went to high school who had the nicest clothes and shoes? yup those same whining individuals.

    Are there exceptions? i'm sure there's people who are poor. 
    Young men who have to pay child support.
    Oppressed by the justice system i'm not going to draw a blind eye to certain things
    but in my opinion if you sacrifice your materialistic needs and save your money you'll be okay.

     

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  23. And this is the problem. You sir are grossly misinformed. Most families now have 2 earners, working harder than ever and barely paying their mortgages, bills, car payments, ect. Middle class pays a more percent of wages in taxes than a capitalist who can afford accountants and fancy loopholes. Please don't speead nasty information

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  24. Having studied this topic a bit recently I am finding that more relevant than income disparity is wealth disparity. THAT is where the rich are getting richer and that provides for opportunity differences between classes that are making the class separation grow more and more. Read Our Kids by Robert Putnam. Much more informative, in depth, relevant than this video.

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  25. According to the U.S. Census Bureau (https://www.census.gov/hhes/www/income/publications/newydata.pdf) in 1975 the bottom 20% had an average income of $11,826 while the top quintile made $89,176

    How to match that with 2:14 where the video claims 40 years ago the poorest quintile had an average salary of just $1,263 and the richest $50,077?

    1975 income distribution:
    Census Bureau……….Narrator claim
    $89,176………………..$50,077   (wealthiest 20%)
    $51,080………………..$24,568
    $37,250………………..$14,227
    $25,288………………..$ 6,893
    $11,826………………..$ 1,263    (poorest 20%)

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  26. What gets me is the % of total wealth is greater for the rich now then in the past yet his graph shows an exponential increase in the poor getting richer but their are far more poor households then rich households so shouldn't the fact that the poor households, income grew by some 20,000 and the riches' grew by some 4,000 go against what the % of total wealth is now in the rich vs poor? How did their % of total wealth grow when, according to the numbers provided showed the opposite trend?

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  27. This man's a blithering freaking idiot. All one need do is compare asset decline of avg households, juxtaposed with that of the top 10%. Boom, retardation shot to hell. NEXT!!

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  28. And of course they don't talk about the entire world because the US is the only country that matters right?

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  29. It is a fact that minimum wage workers are getting poorer. A person in 1968 making min wage had more buying power than a person making min wage today. The wages of the poor is simply not keeping up with inflation.

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  30. Nice. Use 1975 vs. 1997 and 1991 data for salary distribution- ignoring the fact that income inequality skyrocketed in the 2000s or that high net worth individuals wealth is from capital gains and not salaries.

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  31. Money is simply a way we measure access to resources, are more resources coming to the US, if so that can only be at the expense of either other countries of the planet is just being stained more?

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  32. This is total bunk now. It was true when he made this film. It also makes some good points, Thomas Sowell and Nobel Laureate Miltion Friedman also made this argument, decades ago.

    But since then Glass-Steagle was repealed and the banks were unleashed upon society. They have stolen everything that was not nailed down and $43 trillion has vanished into thin air.

    No way the poor can keep pace with that unless you have 500,000,000 paid for houses in your back pocket.

    This is an interesting channel but this video is an embarrassment. Update it or delete it.

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  33. What happens when the cake collapses and suddenly is reduced to 50% of its size? Then they try to repair the cake with much cheaper ingredients and less sugar (cakeflation) but it collapses again?

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  34. The wealth share of America's top 3 percent, Fed researchers calculate, rose from 44.8 percent of the nation's wealth in 1989 to 51.8 percent in 2007 and 54.4 percent in 2013. The top 3 percent now hold over double the wealth of America's poorest 90 percent of families. Click this link for more info http://inequality.org/wealth-inequality/

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  35. there's a link to more recent government data that pretty much shows the trend towards upward mobility continues

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  36. why didn't you consider that fact that the median household income in the U.S. has decreased since the 1990's? It seems like this video didn't really go into much dept.

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  37. you are missing out the point that either rich or poor people are all covered with debts in the US since most people have 2-3credit cards. Maybe they have effectively more money but they pay more fees for their debts and in the final have a smaller buying power. And the value of a $in 1975 is not the same than todays due to inflation.

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  38. Considering that the U.S Debt is bigger than the World economy, and that this debt is getting bigger and bigger and they don't have the money to pay it.

    Would be correct to say that they are the poorest country in the world?

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  39. So this "doctor" doesn't understand cost of living increase or inflation, and also doesn't seem to know that the word "data" is plural? I'm convinced.

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  40. Your data stops in 1991, the trend has shifted since then. Read Capital in the XXI Century by Pikketi and you will see data from 2011 and so forth.

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  41. This the is false and inaccurate you never take in account inflation and the top income earners…. The RICH ARE GETTING RICHER! This has right wing basis written all over it

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  42. Sorry that this video doesn't take inflation into account. Also, including wealthy young people as "the poor" is probably unfair. I hope Learn Liberty decides to drop this video. Also, as others have commented on, ending the statistics at 1991 is probably unfair. Things seem to have gotten a lot worse since 1991.

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  43. Does this data take into account inflation?
    The increasing size of the pizza and decreasing size of the relative share suggests to me that while the actual numbers have increased (higher amount of money coming in) the relative buying power of that money is decreasing. It's all well and good if you're making an extra $4/hr today compared to yesterday but if the price of your weekly groceries goes up by $160 as well then you're not really seeing much of that extra income. You're playing the same old game just with bigger numbers.

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  44. No dude your wrong the richer are getting richer and the poorer are getting poorer the rich people has most of the worlds money that's the reason on why businesses are going out of business cause they don't have the money to hire people to do their dirty work

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  45. The data isn't wrong. Yes, the poor are earning more money than they were in the past. However I don't think the change in the amount of money (wealth) earned by the poor has very much to offer in terms of showing how the quality of life for the poor has changed. The phrase "the rich are getting richer and the poor are getting poorer" is implying that it's getting harder for the poor to get by. What it comes down to is the cost of living relative to wealth, not simply the change in wealth.

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  46. I see a lot of Sander's supporters have taken over the comment section. Goddamn, I honestly don't see any difference between Trump and Sander Supporters. Both demagogues that are appealing to the idiot common people

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  47. Income is one thing. Wealth is another. Inflation, cost of living, CPI, savings, investment, there are so many things ignored in this data

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  48. Did all your research on this topic not lead to to discover that all money is created in the form of debt and because there is interest attached to the money when it's created it can never be fully repaid and the gap between what we owe and what we earn is becoming larger everyday. So the poor may have more money that in years past because there has been more money created, but the bill for this unequally distributed structure of wealth is becoming impossible to pay in any fair way. If you want to tell the whole story, then tell the world damn story!

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  49. I assume that when you say the poor are making more today than in the 70s you mean as compared to cost of living, etc. and not just adjusting for inflation, right?

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  50. He illustrated the stagnation of the middle class perfectly. What about showing your singled out information in correlation to all income. This is TOTAL BULLSHIT. Eat it up suckers!

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  51. The link to the new data stopped working, so I went and found the right one. https://www.treasury.gov/resource-center/tax-policy/Documents/Report-Income-Mobility-2008.pdf

    Spoiler Alert
    "About half (58 percent by one measure and 45 percent by another measure) of those in the bottom income quintile in 1996 moved to a higher income group by 2005. "

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  52. Love your videos! I like that you're presenting the contrasting point of view of the "wealth distribution" video.

    But you have some major flaws. You compared a poor household with a middle class household. The video you are contrasting is talking about the top 1% have 40% of the wealth….. and why are you using statistics from 1975 vs 1991? we have statistics from 2015 on household income…. Looking into this video makes it seem like you guys are trying to mislead. Please correct me if I'm wrong. I'm not an economics major, so maybe i'm missing something.

    edit: saw the upload date of 2011 but still the statistics used were 20 years old.

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  53. I have an honest question: Why are your numbers so old? Why the cutoff at 1991? What has happened since then?

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  54. Key statement: "If we look at the data…" because almost everyone knows that you can play with numbers and make them say whatever you want them to say with a little manipulation in the presentation and selection in/collection of the data. So when someone makes an argument based on supposed statistics (or worse, surveys), be wary, be very wary (or, make it easy on yourself, just completely ignore them).

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  55. I see a shit ton of butthurt people in this comment section but no actual counter aguements. Explination people shared this on facebook and burnie supporters didn't like having their views challenged.

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  56. The income to debt ratio is larger for the poor than for the rich. True poverty is not only measured by income but also by debt. I can make a million dollars a year, but if I owe 49 million in debt then I am actually very poor, or you can say that I'm visibly rich but invisibly poor. So, actually this video is a myth.

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  57. This by far is the best Learn Liberty video I watched! Subbed

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  58. Those finding a recent income mobility data (1996 to 2005): https://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf

    If it doesn't work, look it up in the archives

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  59. All poor I know have been that way threw generations idk what this guy talking about

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  60. You made no mentions of cost of living. Yes income has increased for everyone in absolute numbers, but so has cost of living. In fact, the growth in cost of living has outpaced the increase in income. So yes poor are technically earning poor than decades before, but their quality of life has decreased.

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  61. Well, it's obvious you're going to argue that the poor are not getting poorer. However, they do have a sense of style and wouldn't be seen dead in the clothes you're wearing.

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  62. The dumbest arguments I’ve ever heard. This arguments is based on old facts from the seventies thru nineties. During that time period there were more union jobs and affordable education which accounts for the upward mobility for the poor. Since that time, the mortgage crisis gutted the working and middle classes, most manufacturing jobs went abroad, the cost of education and healthcare skyrocketed, and retirement benefits are a joke. Come back and base your stats from 2000 onwards.

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  63. Here are the actual stats regarding income:
    http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/

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  64. the IRS releases aggregate data on individual income taxes, with a two-year delay. The Tax Foundation helpfully organizes the reports, and in January they released their summary of the data for 2015. We will look at estimates for this year in just a bit.

    In 2015, 141.2 million taxpayers reported a total of $10.14 trillion in adjusted gross income (AGI). On this amount, they paid $1.45 trillion in taxes, or 14.3%. That’s our collective average tax rate, in other words. But we know averages can be deceiving, and this one certainly is. Most people paid well below that rate, and a small number paid a great deal more.

    We’ll start at the bottom. The lower half of those 141.2 million tax filers had total AGI of $1.145 trillion, or about 11.3% of all income. On this, they paid $41.1 billion in taxes. Their average tax rate was 3.5%, and they paid 2.8% of all taxes.

    Note, that’s the lower half of taxpayers – meaning they filed tax returns. There’s a large group below them who didn’t have to file because they had no taxable income. So well over half the population either paid no income tax at all or paid a very low percentage rate.

    Jealous? You shouldn’t be. Do the math and you’ll see the average AGI for this bottom half of taxpayers was only $16,211. These are not wealthy people. Literally, housing and food and other basics are critical issues for them. Most were employed in some way for at least part of 2015, since they have income, but they didn’t make much. The system is designed to give them a break on taxes, and it worked.

    At the same time, this income inequality has a frustrating consequence: the other half of taxpayers bear almost the entire burden. Note that the top 10% pay 70% of income taxes. The top 50% pay 97%.

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  65. I agree with lean liberty position in everything. But Craig Roberts in his book Failure of Capitalism says that real incomes of american housholds has not been growing since 1970…

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  66. Summary

    Truth – Over time the rich have gotten a larger slice of national income
    Truth – Over time the poor have gotten a smaller share of national income

    1) Your share of the pie can change, but the pie itself is getting larger
    Years ago "poor" meant basic necessities of food and water
    Today "poor" people have smartphones, multiple cars, etc

    2) Individual Households move in and out of their categories AKA income mobility
    Rich families lose their money in the next generation.
    Poor families rise up and become rich.

    Source??? – 86% of poor households in 1979 were no longer poor in 1988
    University of Michigan – 95% of poor households in 1975 were no longer poor in 1991

    TL:DR – the poor are not getting poorer, they are in fact, getting richer.

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  67. this guy was using numbers from the 70s 80s and 90s back when the welfare system was in its heyday before the mid90s welfare reforms. The poor got richer because of the late 70s early 80s welfare boost.

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  68. People complaining about the time frame either don't have internet access or are arguing in bad faith, wages fell from the mid 1970s until the mid 1990s for nearly half the labor force, since then wages are up, now around 10-20% higher than the cyclical peak in 1973.

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  69. you should all read capital from Tomas Picketty…where you will find all data that show that everything this man has shown is lie…. wages are stagnate from 1970.. percentage of income going to 1% is increasing and levele of inequality can only be compered with time of rober barons from the start of twentieth century….and explore who gives money for this chanal and guess what it's a billionaires who have interest for protecting this status and let normal people live in ignorance and stupidity and accepting all of this as normal without a fight….

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  70. That's only half the story now add in the lifetime of each human being and multiply it by 5 Generations Gage all that and tell me what you see now you're getting a clearer picture of what's really happening

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  71. absolute vs relative poverty. your bullshit does not justify people stsrving in the streets

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  72. It's no myth in Australia, 99% of young people can't afford to buy a house while the rich buy new houses to rent to more poor people.

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  73. Where can I get the sources of the data of the individual households, and percentage of people being lifted out of poverty over the period of time of two sets of the data?

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  74. People cant buy homes and must rent, cars are almost too expensive. You are a PhD tell is rubbish to any house wife and she.will tell you that you are nuts. Do it!

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