Millionaires Vanishing: Are Progressives Satisfied Yet?

One of the Progressive Movement’s core doctrines is that the economy is a zero sum battle ground where the rich face off against middle class workers with one side enjoying greater prosperity only at the expense of the other.  But in reality their interests are in harmony and their fortunes rise and fall together.

The IRS just released statistics for the 2009 tax year.  Since their ideology identifies “income inequality”  as the evidence that workers are losing the battle, progressives should be pleased to learn that the recession has been particularly harsh for the group they most love to hate, millionaires and billionaires.

  • In 2007  approximately 3 of every 1,000 taxpayers earned more than $1 million.
  • By 2009 the number had fallen by 40% to fewer than 2 of every 1,000 taxpayers earning over $1 million.

While the huge increase in annual budget deficits from 2009 on was mostly due to a surge in new spending, falling tax revenues due to the recession also contributed.

The next chart shows what happened to employment after enactment of the “Bush Tax Cuts” in 2003 that established the tax rates still in effect today.
Both Employment and the number of people with million dollar incomes were falling before the Bush tax cuts of 2003, and then they both increased after the current tax rates were enacted.  Employment began to fall again as the recession drove down the number of millionaires.

In virtually every speech and public appearance President Obama urges tax increases on “millionaires and billionaires,” an idea that will likely be part of his “jobs plan” to be revealed after Labor Day.  But the cost of tax increases on the wealthy also falls on the non-wealthy as investment capital is diverted from job creating business enterprises to politically driven priorities of Congress and the President.

Tomorrow: The effects of the Bush tax cuts on tax revenue from millionaires and billionaires.

5 Comments so far

  1. Drew on August 25th, 2011

    Its attributed to Lincoln, although that may be apocryphal. In any event its true. “You cannot help the poor by harming the rich.”

    It belies the reall attitude of so much of the the left: greed and envy.

  2. WisBlueDog on August 26th, 2011

    You’re attempting to correlate two disconnected statistics that aren’t related to each other. The graph is meaningless.

  3. AzTex on August 26th, 2011

    If tax cuts for millionaires created jobs our unemployment rate would be 1%. the rich have never paid less in taxes and the economy has never been worse.

    If the rich are investing at all it’s in Chinese jobs.

  4. Drew on August 29th, 2011

    In what way are they not correlated? They are highly correlated.

    Let me help you, you must actually be referring to causality. And yet so many of the income earners that have fallen are the people who own small businesses and hire. I would say the burden is on proving that there is no causality. Got another explanation?

    Scrap that. Your confusion about causality vs correlation casts doubt on the meaningfullness of your remarks. Perhaps AzTex in quality. Carry on.

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