Wealthy Americans Gain Even as Republicans Decry Redistribution – Bloomberg 09-28-12

Salient to Investors:

The Census Bureau Gini Index shows income inequality reached a new high in 2011. Quarterly corporate profits have almost doubled since the end of 2008, while workers’ inflation- adjusted average hourly earnings have declined.

Anne Mathias at Guggenheim Securities said said fifty years ago it was how the other half lived, and now it’s the other 1 percent. Mathias expects a successful push to tax the rich during post-election budget talks.

The Congressional Budget Office calculations show inequality in 2009 wasn’t much worse than in 2003 – it includes the value of employer-provided health insurance, taxes and government benefits.

Dean Baker at the Center for Economic and Policy Research said government affects income distribution through other channels, including minimum wage, collective-bargaining rules, stimulus spending and allowing certain types of foreign workers into the U.S.

Emmanuel Saez of the University of California, Berkeley said the top 1 percent of families garnered 93 percent of the income gains in 2009 and 2010.

A Congressional Research Service study concluded that previous rate-cutting had little association with saving, investment or productivity, but did exacerbate the rich-poor gap.

Citizens for Tax Justice says the U.S. tax system is a mix of a progressive federal income tax and regressive state and local taxes.

Read the full article at http://www.bloomberg.com/news/2012-09-28/wealthy-americans-gain-even-as-republicans-decry-redistribution.html