Posted on 07/29/2004 6:21:43 AM PDT by FoxPro
The overall income Americans reported to the government shrank for two consecutive years after the Internet stock market bubble burst in 2000, the first time that has effectively happened since the modern tax system was introduced during World War II, newly disclosed information from the Internal Revenue Service shows.
The total adjusted gross income on tax returns fell 5.1 percent, to just over $6 trillion in 2002, the most recent year for which data is available, from $6.35 trillion in 2000. Because of population growth, average incomes declined even more, by 5.7 percent.
Adjusted for inflation, the income of all Americans fell 9.2 percent from 2000 to 2002, according to the new I.R.S. data.
While the recession that hit the economy in 2001 in the wake of the market plunge was considered relatively mild, the new information shows that its effect on Americans' incomes, particularly those at the upper end of the spectrum, was much more severe. Earlier government economic statistics provided general evidence that incomes suffered in the first years of the decade, but the full impact of the blow and what groups it fell hardest on were not known until the I.R.S. made available on its Web site the detailed information from tax returns.
The unprecedented back-to-back declines in reported incomes was caused primarily by the combination of the big fall in the stock market and the erosion of jobs and wages in well-paying industries in the early years of the decade.
In the past, overall personal income rose from one year to the next with relentless monotony, the growth rate changing in response to fluctuations in economic activity but almost never falling.
But now, with many more ordinary employees joining high-level executives in having part of their compensation dependent on stock options and bonus plans, a volatile and relatively unpredictable new element has been introduced to the incomes of millions of workers.
"Risks used to be confined largely to executives and business owners with large incomes,'' said Edward N. Wolff, an economist at New York University who studies wealth and income.
"But now for many people with more modest incomes their earnings are more volatile,'' Mr. Wolff added, leaving them more vulnerable to losing pay they count on to meet regular expenses like mortgage payments, car loans and day-to-day living costs.
(Excerpt) Read more at nytimes.com ...
"Modern tax system" = withholding
"Did they adjust for the Bush tax cuts?"
Not even relevant - the report is on incomes before taxes, not after.
Gloom and doom are the property of Democrats, return them immediately.
Of course a lot of that underground economy are the illegals making $3 an hour or even less and paid in cash. They've got very low salaries but don't file with the IRS.
From one former Fox guru to another: Fox is dead. Move on to a new platform.
Your biz isn't going any more?
Ok. Just asking.
A lot of people are making much less than they used to make --- I know of journeymen tool and die makers who used to do quite well who do jobs like cleaning carpets to try to stay afloat, the laid-off garment industry workers who were making $8 back in the 80's with health care benefits, are lucky if they make $5.15 an hour now for a part-time job with no benefits. I guess many are balanced out on average by the higher salaries the CEOs are getting.
Unless there's more to the article, it's curious there's no mention of the enormous drop in interest rates on savings, which went from about 7 percent down to 1 percent. That alone should account for a huge drop in income for our elderly and others in our country who keep their money in the bank.
Here is my take from someone out in the trenches.
I specialize in employee benefits especially short and long term disability for groups. For most of the groups I have income levels have stayed the same or have decreased. Why have they decreased? One reason is health insurance is now on average $750-900 per month and employers are paying less so the employees have more taken out of their pay resulting in less income.
I have also seen many groups lower the pay for new employees or cut back on overtime. A friend of mine makes on average about 60K per year with overtime. The company he works for has banned overtime for the last 2 years so his pay has dropped to around 48-52K.
Trust me as someone who sees what employees are making the pay is not going up.
"This is a report on 2002 returns, i.e. during the Clinton recession. This is not a report on 2003 or on 2004 thus far."
The declines were for the tax years ending 12/31 2001 and 2002. Who was the POTUS during those 2 years - think like that 'poor woman' at her kitchen table, or a 'spinmeister' for the dems. There is an awful lot of ammo in this report - trying to lay the blame off on a prior POTUS will seem silly and shirking responsibilty, in other words - 'that dog won't hunt'.
I cant even find .NET and SQL Server projects for less than $20 per hour for my friends in Russia and India. We got only 2 large projects in the last year that generated $14,000 for me, and that is it.
One thing that is keeping me alive is the fact that the condo I bought a year ago for $200,000 is now appraised at $260,000. This helps.
Sorry, even though Bush was President, the economy is not an instant barometer of policy. But maybe your one who blames 9/11 on Bush because he had already been President for 8 months, or blames the 9% inflation rate in 1981 on Reagan because he was the sitting President.
That "poor woman" is better off now than she was in 2002 thanks to President Bush. That's why gloom and doom won't work for the Democrats this year, everyone knows it's a crock that Bush is bad for the economy.
Freepers should know better, gloom and doom is only a miasmic fog used when the facts are not what you want them to be. Shame on you.
Looking at those graphs of the distribution of losses and gains shows that people making between 25K and 200K experienced robust gains in both years. This loss of income was primarily limited to the investor class, who got cleaned out in the stock market.
In other words, it was a paper loss. Nothing really changed except people lost their inflated, fictitious stock gains of the late '90s.
Well, Duh!
The declines were starting in the 90's under Clinton. The sending jobs out of the country promised all along to make American workers competitive with the third world workers. It was never meant to do otherwise.
The article, while written in NYTimesese, basically says, the gap between Rich and Working Class shrunk, and the topper is this, inserted smack in the middle of the article.
To some extent, taxes fell more than incomes because of tax cuts championed by President Bush and approved by Congress in 2001. But in that year and in 2002 the cuts applied primarily to those making less than $100,000....
That directly undercuts the Dem strategy of "Tax cuts for the Rich"
Also today in the LATimes, is an article about the Dems cozy relationship with Hollywierd, and the way Middle America hates it.
Then In Esquire...a Lefty writes this... (A really good read)
Are you seeing a pattern here.
It is all about Hillary!ous in 08.
Not entirely correct. The report is on adjusted gross income (AGI), which means that, if I'm not mistaken, additional dependent-child and charitable contribution tax credits passed in 2001 would reduce overall AGI.
Nevertheless, the drop in income comes primarily from the $200k+ brackets. A vast number of filers in this bracket are actually small businesses filing as individuals -- no one should be surprised that in the Clinton recession and followed by 9/11, a lot of small businesses tanked.
Right, I think more immigrants skew the numbers down, and I certainly made less, I retired. (ZHow many retirees are occurring particularly among the wealthy who can well afford it?)
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