The Filthy Rich are a Slippery Bunch

A new report from the IRS demonstrates how hard it may actually be to track down and vilify the "Filthy, Stinking Rich" that we have been told to loathe so much. The data covers the top 400 income earners for the 18 years 1992-2009. Turns out that 73 percent of taxpayers appear on the list only once. Only 2% appear on the list 10 or more of the 18 years. Drat! I now have a moving target for my wrath.

Whenever we hear commentary about the 1% or the 5% or the X% by income, a common inferences is that these are static groups with very little turnover - once you get into a top or bottom group, or a certain income percent,  you stay there for decades. The Poor are always poor. The Rich are ever Rich.

But reality is very different - people move up and down the income  percentage groups throughout their careers and lives. The top or bottom 1/5/10% are never the same people from year to year, because there is constant, dynamic turnover as we move up and down the income categories. So when you are told to lash out at The Rich, do so quickly. They might not be The Rich next year.

Number of Years in Top 400	Number of Taxpayers in Group	Percent of Taxpayers Represented by Each Group	Number of Returns in total Top 400 over 18-year Period	Percent of Returns Represented by Each Group
1	2,824	72.99%	2,824	39.22%
2	458	11.84	916	12.72
3	181	4.68	543	7.54
4	113	2.92	452	6.26
5	67	1.73	335	4.65
6	55	1.42	330	4.58
7	37	0.96	259	3.6
8	29	0.75	232	3.22
9	18	0.47	162	2.55
10 or more	87	2.25	1,147	15.93
Total	3,869	100%	7,200	100%

The War on Capital

If you listen to President Obama go on and on about The Rich not paying their Fair Share of taxes, you might be led to believe that taxes in the US are not highly progressive. That's certainly what he would like you to believe that. Except that it's not true. The US has the MOST PROGRESSIVE tax structure of ALL the 24 OECD countries.

The media likes to talk about rhetorical wars on women when there is a real War on Capital being conducted by Washington right now. The US has the highest corporate taxes in the world. We have the most progressive tax system in the developed world. It's simply harder now than it used to be to generate and keep wealth. While the consequence of a War on Women seems to be that they might have to pay for their own contraceptives, the consequences of the War on Capital, is to drive investment to places other than the US. And the President thinks it would be a good idea to make the US even LESS competitive by imposing a new alternative minimum tax on the most productive people in the country?

Table 4.5. Alternative measures of progressiveness of taxes in selected OECD countries, mid-2000s
	Concentration of household taxes and market income			Percentage share of richest decile
	1. Concentration coefficient for household taxes	2. Gini coefficient of market income	3. Ratio of concentration coefficients (1/2)	1. Share of taxes of richest decile	2. Share of market income of richest decile	3. Ratio of shares for richest decile (1/2)
United States	0.59	0.46	1.28	45.1	33.5	1.35
Ireland	0.57	0.42	1.37	39.1	30.9	1.26
Italy	0.55	0.56	0.98	42.2	35.8	1.18
Australia	0.53	0.46	1.16	36.8	28.6	1.29
United Kingdom	0.53	0.46	1.16	38.6	32.3	1.20
New Zealand	0.50	0.47	1.05	35.9	30.3	1.19
Canada	0.49	0.44	1.13	35.8	29.3	1.22
Netherlands	0.47	0.42	1.11	35.2	27.5	1.28
Czech Republic	0.47	0.47	0.99	34.3	29.4	1.17
Germany	0.47	0.51	0.92	31.2	29.2	1.07
OECD-24	0.43	0.45	0.96	31.6	28.4	1.11
Finland	0.43	0.39	1.11	32.3	26.9	1.20
Slovak Republic	0.42	0.46	0.92	32.0	28.0	1.14
Luxembourg	0.42	0.45	0.92	30.3	26.4	1.15
Belgium	0.40	0.49	0.80	25.4	27.1	0.94
Austria	0.38	0.43	0.88	28.5	26.1	1.10
Korea	0.38	0.34	1.12	27.4	23.4	1.17
Poland	0.38	0.57	0.67	28.3	33.9	0.84
Japan	0.38	0.44	0.85	28.5	28.1	1.01
Norway	0.38	0.43	0.87	27.4	28.9	0.95
France	0.37	0.48	0.77	28.0	25.5	1.10
Denmark	0.35	0.42	0.84	26.2	25.7	1.02
Sweden	0.34	0.43	0.78	26.7	26.6	1.00
Iceland	0.27	0.37	0.72	21.6	24.0	0.90
Switzerland	0.22	0.35	0.63	20.9	23.5	0.89
Source: Computations based on OECD income distribution questionnaire.