Robin Hood would not be happy if he happened upon our incredibly top-heavy modern world. But the new campaign to levy a tax on speculative trading would most likely have him breaking out in smiles.

The most lavishly paid bank CEO in America, Jamie Dimon of JPMorgan Chase, sashayed back to Capitol Hill last Tuesday for still another congressional hearing on JPMorgan’s billions in speculative trading losses this past spring.

Dimon didn’t have much trouble fending off the few tough questions that came his way from lawmakers on the House Financial Services Committee. But Dimon and his fellow Wall Streeters may have much more trouble handling a new campaign — for taxing financial speculation — that launched the same day Dimon testified.

The goal of this new “Robin Hood” campaign: a tiny tax on the ever-churning financial transactions that have made the Jamie Dimons of our time fabulously wealthy.

This Robin Hood campaign for a financial transaction tax actually began two years ago in the UK and quickly spread to over a dozen other nations. The U.S. branch of the campaign that launched last week comes with some high-profile champions.

Actor Mark Ruffalo — a star in the hit film The Avengers — introduced the campaign on Tuesday with a video now bouncing all around the online world.

A follow-up came Thursday, when over 50 top financial industry professionals from around the world endorsed the financial transaction tax notion in a letter to the leaders of the world’s 20 top nations economically.

The volume of global speculative trading, these financial industry experts pointed out, now exceeds — by 70 times — the size of the entire real global economy, the actual goods and services that people use everyday.

This massive speculation endangers the entire world. But a tiny tax on every trade, the financial professional letter notes, could moderate that speculation.

The Robin Hood campaign is calling for a 0.5 percent tax on stock trades — the equivalent of a 50 cent tax on every $100 of trading — and a smaller levy on Wall Street’s heavier-volume, casino-style trading in derivatives, currency, and other speculative instruments.

All told, this level of financial transaction taxing would raise over $300 billion a year from Wall Street, money, notes the Robin Hood campaign, that could “stop foreclosures, fund new jobs, and help repair the social safety net.”

Those Wall Streeters who would bear the vast bulk of the Robin Hood tax burden, nurses union leader Rose Ann DeMoro pointed out last week, can certainly afford to pay a new tax. The pay pools at JPMorgan Chase and the nation’s six other largest banks totaled $156 billion in 2010.

JPMorgan CEO Dimon alone last year pulled in $23.1 million, a sum that Adriana Vasquez, a 37-year-old janitor at the JPMorgan Chase tower in Houston, would have to work over 2,400 years to match. Vasquez and her union confronted Dimon in Washington last week after his congressional testimony.

Vasquez took home $9,000 in 2011, and the contractor that manages JPMorgan janitorial work in Houston is currently offering only a 10 cent-an-hour raise over the next five years.

In Europe, the Robin Hood campaign has already gained serious political momentum, even support from Angela Merkel, the conservative German chancellor. In the United States, two lawmakers — Rep. Peter DeFazio from Oregon and Senator Tom Harkin from Iowa — have a transaction tax bill pending.

A tax on speculative trading, DeFazio said last week, would dampen Wall Street volatility and “drive some of these hedge fund speculators out of the market.”

“These people are getting filthy rich by driving up the price of commodities,” added DeFazio. “They don’t care how they affect the real economy. They don’t care if they drive up the price of oil. They’re just there to trade something 1,000 times a minute with super-computers.”

DeFazio’s financial transaction tax bill calls for just a 0.03 percent tax on speculative trades, a tax rate that runs 321 times smaller than the typical sales tax on a tube of toothpaste.

Most all movers and shakers on Wall Street, not surprisingly, oppose any tax whatsoever on financial transactions, no matter how tiny. They contend that any such tax would cripple investment.

But the United States has a long history of taxing financial transactions. The federal government started taxing stock trades and transfers in 1914 and had a financial transaction tax on the books until 1966.

Getting the tax back on the books will take real effort. GOP leaders in Congress remain dead set against the notion, and the White House is offering no support either. The push will have to come from the grassroots, and that pushing began last week with rallies at JPMorgan Chase offices all across the nation.

In San Francisco, pediatric nurse Martha Kuhl called on Wall Street’s finest “to pay their share.” Added the activist: “If JPMorgan can squander billions in speculation, something is wrong.”

In Washington, D.C., activists protesting JPMorgan CEO Dimon’s Capitol Hill appearance last Tuesday put the matter a bit more rhythmically.

“Jamie Dimon, you’re no good,” the campaigners chanted. “The people need a Robin Hood.”

Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Institute for Policy Studies. Read the current issue or sign up here to receive Too Much in your email inbox.

All those millions that America’s billionaires are pouring into super PACs, where do they come from? We can trace a huge chunk of that political cash to the truly massive tax cuts our richest now enjoy. How massive? Over $25 billion a year — for our most affluent 400 — massive enough for you?

Statistics don’t always lie. But they do always lag. And sometimes this unavoidable lag — between the time a turn of events takes place and the time we have numbers on it — can create a lie, or at least a gross misperception.

Take the just-released new IRS figures on the incomes of America’s most affluent 400. The 400 taxpayers who reported the most income on their 2009 tax returns, the new IRS stats document, averaged $202.4 million each in income, a hefty 25.2 percent less than what America’s top 400 averaged in 2008.

This $202.4 million average represents an even more substantial 41.3 percent dip from the $344.8 million that our top 400 averaged in 2007, the year before the Great Recession started pummeling the nation.

America’s rich, the new IRS stats seem to shout, have “suffered” significantly from the Great Recession, just like everyone else.

Well, not exactly. The “suffering” the new IRS stats appear to show — that substantial dip in top 400 income — took place at the bottom of the Great Recession in 2009. The new IRS data don’t tell us anything about what has happened to America’s top 400 incomes in the three years since then.

But we do have clues from other data sources. We know, for instance, that share prices on Wall Street were rebounding in 2010, setting the stage for a host of windfalls on Wall Street and in Corporate America’s top executive suites.

Next year’s IRS stats on top 400 incomes will likely reflect these 2010 windfalls and show that any “suffering” that America’s super rich experienced after the Great Recession hit turned out to be blissfully short-lived.

What about average Americans? A different story. We know from Census data that average-income Americans are still reeling from the Great Recession. The real incomes of most Americans dropped in 2008 and kept dropping through 2010. Typical workers saw their incomes fall 4.6 percent from 2007 to 2010.

The Great Recession, in short, has amounted to a temporary inconvenience for America’s super rich — and a dream-killer for average Americans.

The new IRS data don’t tell this story. They can’t, since the new data only cover top 400 incomes through 2009. More recent figures haven’t yet become available.

But the new IRS data on 2009 incomes do have a powerful story to tell, even with the data lag. To get at this story, we need to go back in time, not forward, and compare the incomes America’s top 400 collected in 2009 — and the taxes they paid — to the incomes they collected and the taxes they paid in decades gone by.

The official IRS top 400 income figures go back to 1992. In that year, America’s top 400 taxpayers averaged, after adjusting for inflation, $46.8 million each.

The top 400 of 2009 — with their $202.4 million average income — put the rich of 1992 to shame. In 2009, the worst year of the Great Recession, America’s top 400 still took home over four times the income of 1992’s top 400.

If we go back further in time, the contrast becomes even more stunning. The IRS hasn’t published official top 400 lists for any year before 1992. But other IRS data do allow us to approximate a near top 400 for some pre-1992 years.

For 1961, for instance, we can identify a top 398. This 1961 near-400 averaged, after adjusting for inflation, only $14.5 million each. In other words, the top 400 of 2009 collected 14 times more income than their counterparts in 1961.

We can make a similar comparison for a near-400 in 1955. Those rich, in dollars inflation adjusted to 2009, averaged just $13.2 million.

More staggering still: the real-life tax rate on that $13.2 million average income. The rich of 1955, after exploiting every tax loophole they could find, paid 51.2 percent of their incomes in federal income tax.

Their counterparts in 2009, after exploiting every tax loophole they could find, paid a mere 19.9 percent of their incomes in federal income tax.

Let’s pause over these numbers for a moment. They tell a remarkable tale. America’s top 400 in the Great Recession “down” year of 2009 collected over 15 times more income, after adjusting for inflation, than the top 400 of 1955 and paid nearly three times less of their incomes in federal taxes.

What if 2009’s top 400 had paid taxes at the same real rate as 1955’s top 400? What sort of difference would that have made?

Our 2009 top 400, if they had paid taxes at actual 1955 rates, would have together ended up with $25.4 billion dollars less in their pockets.

This over $25 billion in tax savings — for just 400 taxpayers — amounts to a plutocracy tax credit, a giveaway to the super rich that gives our financially favored far more capacity to dominate the American political process than America’s richest enjoyed back in the 1950s.

We can end that domination. But first we need to end that giveaway.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Institute for Policy Studies. Read the current issue or sign up here to receive Too Much in your email inbox.

Today’s swaggering rich are increasingly stuffing their dollars into investments that do America’s 99 percent not one whit of good.

Your pop quiz for today: Define “art.”

Wait, you don’t need to panic here. You don’t need to go fumbling in the deep recesses of your mind for some wisdom about “beauty” or “imagination” or “form.” You just need to repeat after Michael Plummer and Jeff Rabin, the two principals behind the midtown Manhattan-based Artvest Partners LLC.

“Art,” their maxim goes, “is an asset class.”

ArtVest Partners, the trendy financial firm Plummer and Rabin run, helps wealthy people invest in works of fine art. The firm is doing a bang-up business.

America’s wealthy — and deep pockets everywhere else for that matter — have been pouring epic sums into artwork. Christie’s and Sotheby’s, the two big fine art auction houses, are reporting a 35 percent gain in the prices paid for Gainsboroughs, Picassos, and other blue-chippers over the past 12 months.

The Artprice Global Index, a broader tally of the prices works of fine art are fetching, has art values up 120 percent over the last decade.

Why the surge? Higher prices reflect no greater appreciation — on the part of the wealthy — for the aesthetically pleasing. They do reflect a greater appreciation of art, within high-income circles, as a high-return investment. And bankers are appreciating, too. Financial institutions are making art-based loans. They’re letting mega millionaires use their artwork as collateral for business deals.

“We now can start talking,” an arm of Deloitte, the global consultancy firm, reported last month, “about the early stages of an Art and Finance industry.”

The continuing Great Recession in regular, old-fashioned industry, analysts at ArtInfo explained last week, is helping this new art-and-finance combo along.

“International high-net-worth individuals,” the analysts point out, “are looking for somewhere to put their money besides the anemic stock market.”

But the art world hasn’t been the only “asset class” to benefit from this yearning for larger and safer returns. Dollars and euros and pounds are also flowing to other “hard” assets that share all the attractions that fine art offers. Silver, wine, and gold have all been ratcheting up steadily over recent years.

This past September, Investment Week’s Joe Roseman gave all these hot asset classes a memorable new handle.

“Everyone,” Roseman advised his well-heeled readers, “needs some SWAG.”

The elements of SWAG — silver, wine, art, and gold — have “all appreciated quite sharply” over the past decade, notes Roseman, despite “two global recessions, a severe global banking crisis, a credit crunch, and (generally speaking) highly volatile and mostly negative equity market performance.”

Fine wines, the Liv-Ex wine index shows, have jumped about 300 percent since 2000. Gold has appreciated at an even higher rate, as has silver.

The Standard & Poor’s 500 stock index, by contrast, rose just 0.04 percent in 2011, returning only 2.1 percent with stock dividends included.

The SWAG elements have plenty in common. Silver, wine, art, and gold all rate as scarce, transportable, long-lasting physical assets. They also make for wonderful tax shelters. They throw off no income stream and, consequently, create no annual tax liability for wealthy investors.

The profits SWAG assets generate at sale, meanwhile, count as capital gains and receive preferential tax treatment over ordinary income.

These tax benefits from SWAG ought to create obvious concerns for those of us in America’s 99 percent. The less the nation’s wealthy pay in taxes, after all, the greater the tax burden on everyone else.

But our cause for concern ought to go deeper than the tax games the swaggering rich can play with SWAG assets. SWAG just may symbolize the ultimate folly — and sheer irrationality — of our staggeringly unequal, top-heavy economy.

In today’s troubled economic times, we desperately need investments in products and services that translate into jobs and paychecks. We need dollars for renewing our society. We need dollars for everything from replacing crumbling infrastructure to developing sustainable new energy technologies.

The last thing we need? We don’t need billions of valuable dollars sunk into SWAG that hangs on the walls of manses or ages in high-tech wine cellars or sits in locked safes. But in a deeply unequal United States, where wealth remains concentrated in a precious few pockets, that’s exactly what we have.

Many of those dollars pouring into SWAG today would have gone yesterday to Uncle Sam. In the middle decades of the 20th century, America’s wealthiest faced income tax rates that reached up over 90 percent on income over $400,000.

In that high-tax-on-high-income environment, wealthy Americans routinely plowed their wealth into tax-free municipal bonds. In the 1950s, for instance, the widow of automaker Horace Dodge invested her entire $56 million legacy from the Dodge auto fortune in municipals.

Those municipals didn’t help Anna Dodge much. They paid only 3 percent in interest. But the dollars invested in municipals paid off handsomely for the mid-century 99 percent. Those dollars financed the schools and sewage plants and waterworks that created the foundation for the classic American middle class.

Those mid-20th century days did, to be sure, hold certain charms for America’s deepest pockets. They could pick up works of art for a song. In 1960, banker David Rockefeller only had to shell out $10,000 for painter Mark Rothko’s White Center. In today’s SWAG world, White Center now carries a $72 million price-tag.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Read the current issue or sign up at Inequality.Org to receive Too Much in your email inbox.

All sorts of federal agencies publish income inequality data. But only the nonpartisan Congressional Budget Office directly takes on America’s income inequality deniers.

Back in 1979, America’s most affluent 1 percent took home — after federal taxes — about the same share of the nation’s income as all the Americans in the bottom 20 percent. In 2007, Americans learned last week, the nation’s top 1 percent took home more income than America’s entire bottom 40 percent.

These new stats didn’t come from some scruffy Occupy Wall Street encampment. They came — in a blockbuster new report — from the buttoned-down number crunchers at the nonpartisan Congressional Budget Office. And the portrait they paint essentially gives the Occupy movement’s most basic insight, that our top 1 percent has hijacked the nation, an official government imprimatur.

Over the past three decades, the new CBO study documents, the deep pockets who make up our top 1 percent have more than doubled their share of America’s after-tax income, “from nearly 8 percent in 1979 to 17 percent in 2007.”

What makes the new CBO figures so significant? Other federal agencies, after all, do regularly drop their oars into America’s income distribution waters. But the statistics these agencies report never quite capture the complete big picture.

The Census Bureau’s annual income surveys, for instance, don’t even attempt to cover what’s happening at America’s economic summit. And IRS statistical tallies only include Americans who make enough to have a file a tax return.

Analysts at the Congressional Budget Office neatly solve this statistical snafu. They massage Census and IRS data together. But they don’t stop there. Their new report also directly challenges the nation’s inequality “deniers,” those apologists for concentrated income and wealth who loudly claim that the United States hasn’t become nearly as unequal as the Census and IRS data suggest.

These apologists invoke a variety of objections. Income breakdowns, they insist, should take into account the dollar value of all the government services that go to poor people — and adjust for differences in household size as well. The new CBO report released last week, Trends in the Distribution of Household Income Between 1979 and 2007, does all that and more.

The CBO’s expansive definition of income encompasses nearly every household revenue source imaginable — not just wages and salaries, but income allocated to 401(k) plans, not just Social Security and workers’ comp, but “the value of in-kind benefits,” everything from food stamps to free school lunches.

The CBO even counts as individual income what employers shell out for your Social Security, Medicare, and health insurance coverage. In other words, the CBO essentially tallies everything that impacts your economic well-being.

On top of all this, the CBO has adjusted all its income figures for inflation, for every year from 1979 through 2007. Why pick these two particular years? One practical reason: Some data streams the CBO taps only start in 1979.

The more significant reason: Both 1979 and 2007 rate as “economic peak years just prior to a recession.” By starting and ending at an economic peak, Congressional Budget Office researchers are comparing apples to apples — and giving a much more accurate sense of basic long-term trends.

These trends, the new CBO analysis finds, vary enormously by income level.

For households in the top 1 percent — households making over $352,875 before federal taxes in 2007 — the trend line goes steeply up. These households saw their after-tax incomes soar 275 percent between 1979 and 2007, quadruple the 65 percent increase for the rest of the households in the nation’s top 20 percent.

And below that top 20 percent? After-tax incomes for America’s statistical middle class, the middle 60 percent of the nation’s income distribution, increased “just under 40 percent,” or a bit over 1 percent a year, barely enough to cover an average household’s rising utility bills.

Households in the bottom 20 percent fared even worse. Their incomes, after adding in federal “transfers” like food stamps and subtracting federal taxes, increased only 18 percent over 28 years, less than 1 percent a year.

All this “uneven income growth,” the new CBO report notes, has left the United States with a “substantially more unequal” distribution of income.

The new CBO numbers tell the same inequality story, no matter how you cut the data. Every category of income — from wages and salaries to dividends and capital gains — tilted more to the top 1 percent in 2007 than in 1979.

Has that tilting continued? The new Congressional Budget Office report doesn’t go beyond 2007. But all other signs, from CEO compensation to hedge fund manager pay rankings, point to even greater inequality today.

The latest sign comes courtesy of the Social Security Administration. SSA rsearchers reported earlier this month that half of America’s workers earned under $26,364 last year. The number of Americans making over $1 million, according to W-2 form payroll data, skyrocketed 18 percent.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Read the current issue or sign up at Inequality.Org to receive Too Much in your email inbox.

Here’s the clip of a conversation we had yesterday on The Alonya Show about the new CBO report, which provides even more data on the explosion of wealth at the very top of the scale, the injustices driving Occupy Wall Street, and where we go from here.

After Alonya sets up the discussion by providing the figures, we start talking at about 1:00 minutes in (if it’s not displaying properly below you can see it here):

The deficit commission report issued last week is another Saturday night special pressed to the temple of the American middle class.

“Turn over your money and your benefits or your country will die,” the report screams at workers. “You want your country to go bankrupt? No? Then you gotta delay retirement, get less from Social Security, pay more for health insurance and lose your precious few income tax breaks like the one that helps pay your mortgage while the banker is breathing down your neck right now.”

For 30 years, rich conservatives have successfully threatened the American middle class this way, ever since that rich conservative Ronald Reagan converted the White House into a castle.

The result is a country with greater income inequality than during the age of corporate robber barons at the turn of the 20^th century. It is a country whose 21^st century robber barons, the richest 1 percent of Americans, take nearly a quarter of all income and demand that politicians relieve them of their obligations. The rich — hedge fund owners who rake in billions, Wall Street banksters handed bonuses in the millions, CEOs paid eight-figure golden parachutes after they mess up — insist that politicians place government debt burdens on the middle class, the unemployed, the elderly, the struggling young, people whose income has stagnated for three decades.

The co-chairmen of the deficit commission complied with that mandate from the flush when they recommended the middle class bear the brunt of the cost of reducing the deficit. Simultaneously, conservatives in Congress are acquiescing by insisting on extending tax breaks for the nation’s wealthiest. Those are the very tax breaks that contributed dramatically to creating the debt – the one that the deficit commission now wants heaped on workers’ backs.

This will be the death of the nation’s strength — its successful working class. Without the slightest regret or hesitation, the rich are killing the great American middle, rendering it a casualty of their shirked social responsibilities. Their campaign has been abetted by Republicans since Ronald Reagan. The Gipper contended slashing taxes for the wealthy would increase revenues for the government. Republican George H. W. Bush rightly ridiculed Reaganomics as voodoo.

In the GOP years between the beginning of Reagan in 1981 and the end of Bush II in 2009, the federal deficit exploded as Republican presidents failed to control spending and repeatedly cut taxes for the rich.

Reagan reduced the rate on the richest first down to 50 percent, then to 28 percent. The resulting budget deficit converted the U.S. from the world’s largest international creditor to its largest debtor. And now, the deficit commission sends the bulk of the bill for voodoo economics to the middle class, not the rich.

While Reagan gave the rich those breaks, income inequality increased. The share of total income taken by the richest 5 percent grew from 16.5 percent the year before he took office to 18.3 percent the year before he left. In that same time, the share of total income that went to the poorest 20 percent of households fell from 4.2 to 3.8 percent.

Democrat Bill Clinton fulfilled a campaign promise by increasing taxes on the rich — to a 39.6 percent marginal rate. He balanced the federal budget and left Bush II with a surplus.

Then Bush II squandered it. He gave the rich more tax breaks, accumulated debts larger than all those created by previous presidents combined and worsened income inequality. During his administration, from 2002 to 2007, the pretax income of the richest 1 percent increased 10 percent every year. Over that same period, the median income for working Americans declined and the poverty rate rose.

From Reagan through Bush II, more than four-fifths of the total increase in U.S. income went to the richest 1 percent. Hedge fund owners, whose income is literally in the billions, pay income taxes at 15 percent – lower than the rate paid by their secretaries, who earn far less in a year than any of the top 10 hedgers do in half an hour.

Wall Street recklessness crashed the U.S. economy, throwing millions of middle income earners out of their jobs and their homes. The banksters went to Washington and got politicians to hand them bailout billions, and now those Wall Streeters plan to increase their bonuses — while unemployment remains stuck at 9.6 percent in the Main Street economy.

It is those guys, bankers grabbing year end bonuses totaling two and three times what middle class earners get for a year’s labor; it is the five-home wealthy demanding that the foreclosed-on middle class suffer for the deficit. The rich, who have received the greatest benefits from this society, have no intention of paying their share of this national responsibility.

The deficit, the Social Security shortfall, difficulties with Medicare – they could all be solved if the nation returned to taxing policies that existed under Republican President Gen. Dwight D. Eisenhower, when the rate on top earners was 91 percent. That was not even the high point. In the mid-1940s it was 94 percent. Generally it fluctuated between 81 percent in 1940 and 70 percent when Reagan began slashing it in 1981.

Those rates may sound confiscatory now, but it’s not like the rich actually paid them after they subtracted out all of their exemptions, deductions, loopholes, special deals, tricks and wiles.

The dozen years in the 1950s and 1960s when the rate on the richest officially was 91 percent is a time considered by many Americans to be among the nation’s greatest for the middle class, a period when American workers could afford to buy homes, send their kids to college and travel across American on vacation.

There’s no talk of that now. Raising taxes on the rich now is considered ludicrous. Ridiculous. The whole Social Security shortfall could be solved if the rich paid taxes on their entire incomes, not just the first $110,000, a break that means the wealthy pay a smaller percentage if their income toward Social Security than the impoverished. But the deficit commission didn’t propose that.

No, the rich have succeeded in eliminating as a possibility their paying an increased tax share. Now, the only consideration is cutting their taxes. They didn’t hold an actual Saturday night special to anyone’s head. The rich are snake oil salesmen slick, Bernie Madoff-style schemers. They sold voodoo economics to America, and now they’re intent on making the middle class pay for what that policy has wrought in deficits.

Reagan’s re-election ad was wrong. He didn’t institute “Morning in America.” It was mourning for the once great American middle class.

The 21st century has opened with a decade that has seen the vast majority of Americans go backwards economically. Just-released Census stats tell that tale — but not the whole income story.

The U.S. Census Bureau last week closed the book on the first decade of the 21st century. We now know, after Thursday’s release of Census survey data for 2009, exactly how Americans fared over the decade that began on January 1, 2000.

Average Americans, the new annual Census data make plain, didn’t fare particularly well — even before the Great Recession.

The middle fifth of America’s households opened the decade averaging $52,547, after adjusting for inflation. In 2007, just before America’s economic meltdown, this middle fifth of households averaged $51,691. Last year, after two years of Great Recession, that middle class average stood at just $49,534.

Our new century has begun, as Harvard economist Lawrence Katz noted after the new Census figures appeared, with a “decade of decline.”

And this decade of decline comes after a generation of income stagnation. America’s average incomes rose consistently in the decades right after World War II. But those crisp increases ended in the 1970s. Between 1969 and 1999, the Census data show, incomes of households in America’s middle fifth increased by an average of only $315 a year, less than 1 percent annually after inflation.

Incomes at the top have fared considerably better. America’s most affluent 5 percent, the new Census data document, have seen their incomes rise by 81 percent after inflation since 1969.

These official Census numbers actually understate just how well America’s most affluent have been doing — and significantly so.

Reason one: The Census income totals include all the revenue streams that flow into average American households, everything from paycheck earnings and pension income to disability benefits and Social Security. But the Census doesn’t tally any income that households make from selling stocks and other assets.

These capital gains, according to analyses of IRS data, made up 14 percent of top 5 percent income in 2008, the latest year with numbers available. At America’s economic summit, capital gains count for even more.

In 2008, these capital gains made up 26 percent of the income that went to America’s most affluent 1 percent, 34 percent of the income for the top tenth of 1 percent, and 45 percent of the income for the top hundredth of 1 percent, taxpayers who averaged $27.3 million. None of this capital gains income shows up in the Census figures released last week.

The second reason why the Census figures understate the income of America’s most affluent: Census researchers, to protect privacy, “top code” their data. That is, above certain levels, they stop counting income. Income from an employer carries a $1.1 million Census top code. The income of a CEO who makes $10 million goes down on the Census tally sheet as $1.1 million.

The result? We know from the Census figures how many Americans make between $50,000 and $60,000. But we don’t know how many make between $50 million and $60 million.

Census officials, to their credit, do highlight the growing inequality in the data they do collect. They compare, for instance, income at America’s 10th percentile — “the income level at which 10 percent of the households have income below it” — and income at the nation’s 90th percentile.

Between 1967 and 2009, Census analyst David Johnson observed last week, “income at the 90th percentile increased by 63.0 percent, about twice as much as the 32.4 percent increase for income at the 10th percentile.”

And the Census researchers, also to their credit, collect data on more than just raw incomes. The report they released last week gives a sense of how the Great Recession is changing how Americans live. More families, the Census Bureau informs us, are doubling up on their living arrangements.

Over the last two years, the number of households in the United States has grown by only 0.6 percent. The number of households with multiple families in them, by contrast, has jumped by 11.6 percent. And 13.4 percent of adults aged 25 to 34 are now living with their parents.

But the most troubling figure in the massive new Census data flow lies elsewhere: Over 20 percent of America’s children under age 18 now live in poverty.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Read the current issue or sign up to receive Too Much in your email inbox.

Just in: new data on our staggering income gap. Just emerging: a better understanding why such gaps make economic calamities inevitable.

Years ago, in the mid 20th century, no one in the United States spent much time talking about rising income inequality, for the simple reason that inequality wasn’t rising. But that all began to change in the 1970s, and, by the mid 1980s, independent economists were sounding a rising income inequality alarm.

Conservative analysts, almost ever since, have been advising us to pay that alarm no attention. Anyone who takes the time to take into account all the government benefits that poorer households receive, these analysts have argued, would see we have no inequality problem worth worrying about.

Researchers at the Congressional Budget Office, over recent years, have actually been doing exactly what apologists for our unequal economic order have advised. In their ongoing income calculations, these researchers have been taking government benefits into account, everything from Medicaid to food stamps.

The CBO researchers, to understand how much income U.S. households have at their disposal, have also been factoring into their data a variety of other income intake and outgo streams — the value of employer-provided health insurance, for instance, and the dollars households pay in federal taxes.

The CBO researchers now have comprehensive annual income data sets that go back to 1979. Last month, they updated their data with figures from 2007. The main take-away from the new numbers: We most definitely do have an inequality problem worth worrying about.

Since 1979, the latest CBO stats show, America’s most affluent 1 percent of households have more than doubled their share of the nation’s after-tax income, to 17.1 percent. The actual average after-tax incomes of the top 1 percent have, over that same span, nearly quadrupled after taking inflation into account, from $346,600 in 1979 to $1,319,700 in 2007.

The new CBO’s data most remarkable contrast of all: In 1979, America’s statistical middle class — that is, the 20 percent of households in the exact middle of the nation’s income distribution — took home well over twice as much income, after taxes, as the households in the top 1 percent.

In 2007, our top 1 percent took home after taxes, as a new Center on Budget and Policy Priorities analysis notes, more than the entire statistical middle class.

IRS stats, as crunched by economist Emmanuel Saez, let us track the U.S. income distribution picture back even further in time, to the World War I era. These numbers put the new CBO stats in an even more striking perspective.

In 2007, the data indicate, America’s top 1 percent took in their highest share of the nation’s income since 1928, the year before the epic 1929 Wall Street crash sent the nation spinning into Great Depression.

The year after 2007, we might want to keep in mind, saw a Wall Street crash that sent the nation spinning into Great Recession.

Notice any pattern here?

In 1928, we have a ridiculously high concentration of wealth at the nation’s economic summit. One year later, economic meltdown. In 2007, another ridiculously high concentration of wealth. One year later, another meltdown.

Coincidence? Or direct cause and effect? Or, to put the matter more broadly, does intense income inequality trigger economic calamity?

High-profile economists and journalists are starting to ask that question. Last week brought intriguing attempts at an answer from Nobel Prize-winning economist Paul Krugman and the Washington Post economic analyst Ezra Klein.

Krugman began his discussion by acknowledging that, before 2008, he saw no “clear reason why high inequality should lead to macroeconomic crisis.” Now he sees plenty of potential links.

One might be political. The same political tilt to the right that ends up slashing taxes on the rich — and concentrating income at the top — also minimizes government regulation of the financial sector and ends up leaving economies vulnerable to sudden breakdowns.

But the link may also be more classically economic. In an increasingly unequal society, with more and more wealth amassing in the pockets of a precious few rich, average consumers simply don’t have the means to make the purchases that can keep an economy humming. Economic collapse becomes inevitable.

Other economists, notes Krugman, see inequality’s reflection less in this underconsumption and more in overconsumption. Their argument: In an increasingly unequal society, the rich spend more because they have more. This rising spending by the rich raises a society’s consumption bar.

With this bar rising, middle class families feel themselves under pressure to spend more, too — or else come across as unsuccessful. To do that spending, these average families find themselves saving less and borrowing more. A credit bubble builds and eventually pops. Crisis ensues.

The Washington Post’s Ezra Klein adds still another causal agent into the mix. In a deeply unequal society, he notes, rich people certainly do spend more. But even after spending more, they still have huge piles of cash that need investing.

And the more piles out there, Klein adds, the higher the demand for high-yield investment vehicles — and the higher the potential rewards “for people who can invent new investment vehicles with high yields.”

The result? Amid severe income inequality, says Klein, societies get “explosive innovations in weird financial instruments that look good for a while because the risk is underpriced but end up making the system more fragile when their risks come clear and everyone flees.”

So how, in the end, does inequality send economies crashing? Take your pick from these varied explanations. Or take them all. They all drive home the same basic message. We play with fire when we let income concentrate. Eventually, people who live in staggeringly unequal societies will always get burned.

Sam Pizzigati edits Too Much, the online newsletter on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Too Much appears weekly. Read the current issue or sign up to receive Too Much in your email inbox.

Jack Cafferty at CNN this week ]]> http://blog.ourfuture.org/20100205/danger-falling-middle-class/feed 0 http://blog.ourfuture.org/20090916/the-measure-of-our-progress?utm_source=rss&utm_medium=rss&utm_campaign=the-measure-of-our-progress http://blog.ourfuture.org/20090916/the-measure-of-our-progress#comments Wed, 16 Sep 2009 16:14:37 +0000 Terrance Heath http://blog.ourfuture.org/?p=41594

In the previous post, I included a quote from Franklin Roosevelt’s Second Inaugural Address.

We are determined to make every American citizen the subject of his country’s interest and concern; and we will never regard any faithful law-abiding group within our borders as superfluous. The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.

It was a short quote, only because I couldn’t very well quote the entire speech. I wanted to, because so much in it speaks directly to where we stand today, the kind of country we want to be, and the choices that will lead us closer to that goal — or farther from it.