

The U.S middle class is on the brink of extinction - samratjp
http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here%27s-the-stats-to-prove-it-520657.html?tickers=^DJI,^GSPC,SPY,MCD,WMT,XRT,DIA

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yummyfajitas
Blogspam. Here is the original: [http://www.businessinsider.com/22-statistics-
that-prove-the-...](http://www.businessinsider.com/22-statistics-that-prove-
the-middle-class-is-being-systematically-wiped-out-of-existence-in-
america-2010-7#83-percent-of-all-us-stocks-are-in-the-hands-of-1-percent-of-
the-people-1)

Also incoherent. The author doesn't even define "middle class", and yet some
collection of disparate statistics is supposed to tell us the middle class is
vanishing?

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all
Excellent stats. Thanks for posting this. The picture is pretty bleak.
According to CIA's World Book, 1 in 8 Americans live at or below the poverty
level. Only 6.24% of the working population older than 25 make $100k+. The
average income for the same demographic is around $32k. So, yes, all the data
says the same thing: there is a massive economic polarisation going on in the
US.

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igravious
How long does this keep on going for? Is there some process or mechanism
within the system that will put the brakes on this? Another measure of wealth
disparity is the Gini index. We should forget GDP (or GDP with PPP) (or GNP)
per capita as a metric. If I live in a country where there are only two
people, one of who (not me) earns $1,000,000 per annum and the other (me)
earns $10,000 and I'm told that the GDP per capita is $55,000 I'm not going to
be impressed. But if the Gini index for my little two person country states
that there is a massive imbalance in the distribution of wealth then I'll
prefer that index.

What I'm trying to ask is: how long can this keep going on before some sort of
underclass revolution kicks in. Or, are the poor in the US not _really_
absolutely poor (like rural farm-hand in China poor) but relatively poor (as
in 36" LCD TV instead on 50").

You know what would be a cool hack? Solving this economic train-wreck.

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yummyfajitas
_Or, are the poor in the US not _really_ absolutely poor (like rural farm-hand
in China poor) but relatively poor (as in 36" LCD TV instead on 50")_

Bingo. The poor of today are what used to be described as "middle class" (in
terms of living standards) except with vastly more leisure time.

[http://www.heritage.org/research/reports/2004/01/understandi...](http://www.heritage.org/research/reports/2004/01/understanding-
poverty-in-america)

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macemoneta
They neglected the impact of property taxes, which are regressive (independent
of income). Here in NJ for example, my property taxes are now at 25% of my
income, and that's before other taxes and fees (income tax, sales tax, gas
tax, tolls, etc.). As homeowners go bankrupt or walk away from their homes,
the tax rate is raised to keep the local fiefdom's income level stable.

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pjkundert
The opposite of "progressive" taxation (tax rate is linked with income) is NOT
"regressive". It would be something like "non-indexed", I guess.

Are you suggesting that the taxation of property should not be tied to its
market value?

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macemoneta
Regressive is the term used here for describing property taxes. While not
entirely appropriate, for the sake of communication commonly agreed upon
terminology is used by politicians and the media.

Yes, the taxation of property needs to be tied to market value, but it needs
to be capped in some manner to prevent abuse. For example, pro-rating the tax
against a sliding scale based on income.

The problem is that people get old. Bizarre concept, I know. Once people
retire, their incomes tend to be fixed. As property tax rises uncontrolled
(and unpredictably) year to year, the people that are the foundation of the
community are forced out. Friends and neighbors leave - not because they want
to - but because they have no choice. When the taxes on your home become 30%,
40% or more of your gross on the home you've lived in all your life, what do
you do?

It still might not be so bad if new people moved in. However, if the taxes are
too high home sales in a recession become difficult or impossible. Homes sit
empty as people walk away from the properties. They become run-down, and the
neighborhood degrades. To compensate for the loss of revenue, local government
raises the tax rate continuing the cycle.

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robryan
Wouldn't this just be an adjustment to something that occurred due to lack of
free trade and globalisation/ ease of communication in the past? If someone in
China or elsewhere really can do a job just as well as someone local to a
company and capitalism dictates that a company should maximise profit then it
makes perfect sense to outsource.

