YES! VINDICATION!
Finally, although they missed the most important point, a major news source skirts the issue.
(I feel vindicated. This is an issue that I have written about on numerous occasions, since 1996. Finally, the major media is getting colse to the truth. See the permanent , annually updated article, Tick-Tick-Tick - The Economy Bomb, that covers this issue in detail. I will update that article with the just released numbers from the IRS, within a few days. Also, the article, 1986-2000 IRS Collections Data by Income Group, will be updated to include the 2001 data and links to that newly released IRS data)
One of the primary reason that the incomes of the rich fell in 2001, is the fact that many of our wealthiest taxpayers left the United States in 2001 and took all of their wealth with them. According to pre-Patriot Act, pre-9/11 estimates from the then, INS, almost 300,000 people would leave the United States in 2001. How many of those do you think were poor? Think about it...
In fact, although only a handful of that almost 300,000 expatriates actually bothered to officially renounce their US citizenship, there is much very good reason to conclude that almost all of them were in the upper strata of income earners, with it being weighted heavily toward the very wealthiest 1% of income earners.
Then consider two other facts. 1) Those estimates were made prior to the implementation of the USA (Un)Patriot Act, which was, without a doubt, the greatest assault on privacy and the 4th Amendment in the history of the United States. 2) Many high level business transactions rely upon privacy until they are actually completed and announced. That combination creates a huge incentive for the wealthy, who have been under attack by both parties for years, to finally make the decision to move to a more wealth friendly country, with a more secure business environment. The result is that those pre-(Un)Patriot Act estimates are probably far below the actual numbers.
People like Bruce Bartlett are so concerned with looking for economic reasons for such events that they never look for other outside factors, such as emigration of our wealthiest citizens. They spend all of their time studying the stock markets, the Fed and IRS regulations and trying to relate them to what they see happening, that they often fail to observe the outside social factors that actually may be having a more significant effect on the economy than anything else. Normally, that would be a safe conclusion, since social factors usually only have a minor effect on the economy. However, since the people that we are talking about are the same people who pay almost all of our taxes and fund most of our companies, a very small shift in that group can have a devastating effect on our economy.
The problem isn't the tax rate or a dip in the stock markets. It is the intrusiveness of and the unbridled threat represented by the IRS that is the problem. The wealthy are leaving, because they are sick and tired of having the IRS scrutinize every transaction, to see if they can squeeze an extra dollar out of it. But, now that they are having to meet the heavy and time-consuming (Un)Patriot Act compliance requirements, many wealthy people are finding that their ability to do business in a world where the difference in success or failure may rest in your ability to complete a deal in hours, is being threatened by such time-consuming requirements. Now, they are being forced to seek relief in other countries.
Sure, the wealthy in the US are making less money. That's because so many of the wealthy are leaving and people with lower incomes are suddenly included in that upper bracket. The result is that, as the above article shows, the people in the next lower income bracket are going to have start shouldering more of the tax load. But, that won't happen for long, because as more of the wealthy leave, that extra tax load will have to be distributed downward. If you haven't felt it yet, you soon will.
It's time to abolish the Income Tax and IRS, repeal the (Un)Patriot Act and HSA and implement a non-intrusive National Retail Sales Tax, that will draw wealth back into this country, before it's too late.
This is why the school administration hates me so much and why my classes are in such high demand. Kids talk to the other younger kids every year and tell them who will give it "straight" and who's shovels the B$.