David Cay Johnston - Comments

David Cay Johnston

Investigative Reporter

Columnist at Tax Analysts & Investigative Reporter.

Pulitzer at NYTimes (2001); author of The Fine Print, Free Lunch and Perfectly Legal; president of 4,200-member Investigative Reporters & Editors (IRE); teach law of the ancient world at Syracuse U law and grad business ... more

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Income, Education And Inequality In The "Recovery": Prepare To Be Surprised
5 years ago

Thank you for the kind words.

Top incomes always fall the most in a recession because, statistically, the higher up you are there that comes from capital and the less from compensation for services. When the economy recovers these top incomes grow much faster than all others under current government rules.

In 2009, for example, the 400 highest tax returns averaged $202 million, but in 2010 they averaged $265 million or 31% more. Give the stock market performance when we get the 2011 through 2014 data I am sure it will show huge increases in top incomes.

Note: the 400 are not the highest incomes, only the 400 highest on tax returns. Congress lets many people -- executives, movie stars, top athletes, managers of hedge and private equity funds -- to defer reporting their economic incomes and their taxes for decades, as I have been explaining to my readers in many article and columns since Oct. 13, 1996.

A major problem with counting transfers is asymmetrical information, resulting in serious mismeasurements.

The government publishes detailed statistics on downward transfers, but none on the upward transfers. These upward transfers are so massive – and so concentrated among a small segment of the populace -- that I describe our national economic policy not as trickle down, but Niagara up.

How these stealth mechanisms redistribute upwards is explained in detail in my trilogy –Perfectly Legal, Free Lunch and The Fine Print.

You can read my detailed analyses of the latest official data on wages, total incomes and on the shrinking base of stock ownership in my columns dated Aug. 11, 18 and 25 and Oct. 23, 31 and Nov 6. All are available here: america.aljazeera.com/.../david-cay-johnston.html

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