Thursday, July 10, 2014
Al Jazeera: Americans Have Lost Out on $6.6 Trillion, by David Cay Johnston:
I calculated that enormous figure by comparing the average income Americans reported on their 2000 tax returns with what they reported each year for 2001 through 2012, adjusting for inflation and the growing population. Add up the income for 12 years and it turns out to be $6.6 trillion less than if we had maintained the prosperity of 2000 for a growing population.
Why use 2000 as a benchmark? Well, first off, it marks the end of one era and the start of another. More important, that very good year economically was when George W. Bush, running for president, said American prosperity would get even better if he was elected and his tax cuts — key aspects of which he kept secret until after the election — would ensure American prosperity.
The results: The prosperity of the prior decade was lost. Job growth fell far behind population growth. The median wage (half make more, half less) has been mired since 1998 at a bit more than $500 per week.
In 10 of the 12 years when the Bush tax cuts were in effect, the average income shown on tax returns was lower than in 2000. In the two upside years, average income rose modestly, up $504 for 2006 and $1,744 for 2007. Total those 12 years and the net shortfall per taxpayer comes to $48,010. ...
You will not find these missing income figures in any official government report. I calculated them from IRS data. But measures like this explain why so many Americans feel they are not getting ahead, as Obama observed last week. ... There is more than enough empirical evidence to demonstrate that the Bush tax cuts failed to produce the promised result.