Sylvia Nasar (March 5, 1992): The 1980's: A Very Good Time for the Very Rich https://www.nytimes.com/1992/03/05/business/the-1980-s-a-very-good-time-for-the-very-rich.html: "An outsized 60 percent of the growth in the average after-tax income of all American families between 1977 and 1989—and an even heftier three-fourths of the gain in average pretax income—went to the wealthiest 660,000 families, each of which had an annual income of at least 310,000 a year, for a household of four... giving them 13 percent of all family income, up from 9 percent. The average pretax income of families in the top percent swelled to 560,000 from 315,000, for a 77 percent gain in a dozen years, again in constant dollars. At the same time, the... American family... smack... at the median... saw its income edge up only 4 percent, to 36,000.... 'We know that productivity has increased since 1977 and that more people are working', said Paul Krugman, an economist at the Massachusetts Institute of Technology and the author of The Age of Diminished Expectations.... 'Where did all that extra income go? The answer is that it all went to the very top'.... The broad pattern disclosed by the latest data is not in dispute, but the reasons for the shift are...

'The number that no one had seen was how much of the growth went to a few people', said Mr. Krugman, who focused on the numbers in testimony before Congress several weeks ago.... One explanation given by some tax experts is that the rich are simply reporting more of their income and taking advantage of fewer loopholes, now that tax rates have been trimmed substantially.... 'Inequality has increased back to where it was before the New Deal', Mr. Krugman said. 'But maybe the New Deal only drove the rich underground'. Still, few economists are convinced that the reporting factors are the only explanation. For one thing, wage and salary income for the top 1 percent of families exploded between 1977 and 1989.... The pay of chief executives rocketed during the 1980's.... The surge in pay at the top is just too large to be explained solely by working wives and M.B.A. degrees.... It is easy to exaggerate fluidity at the very top, some economists say. For one thing, the rich may get knocked off their perches from time to time, but the fall for most is not usually all that far.... For the present, the numbers are bound to provide yet another battleground for politicians arguing over which tax policy will produce the best combination of growth and 'fairness'...


#noted #2019-10-07

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