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Rich get richer faster

By Associated Press   April 9, 2008 - 8:12 a.m.

UNDATED (AP) - Rich people in Wisconsin are getting richer faster than middle-income earners and the poor.

A couple of reports released today shows the gap between the rich and poor isn't as wide in Wisconsin as in the rest of the country - but the gap is growing.

Households with the highest incomes in Wisconsin increased their wealth by 36 percent between the late 1980s and mid 2000s. Middle-income households grew by 14 percent and seven percent for the poor.

The reports come from the Center on Wisconsin Strategy and the Wisconsin Council on Children and Families, both based in Madison.

Copyright 2008 by The Associated Press. All Rights Reserved.




reader COMMENTS (45)
skeptical
Apr 10, 2008 at 4:52 a.m.
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What an interesting series of blog responses !
Congrats, Gazette, for making this possible.

janesvillemom
Apr 9, 2008 at 10:52 p.m.
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"The top 1% of taxpayers (AGI over $364,657) earned approximately 21.2% of the nation's income (as defined by AGI), yet paid 39.4% of all federal income taxes."
Russ, You left out the part where the top 1% MAKES 21.2% of the income. When you make all the money, you pay all the taxes! The reason that the wealthy need to pay a higher percentage of the taxes is that they are using the public financed infrastructure in order to make their money. If they want educated employees, schools need funded. If they want to transport their products, roads need built and maintained. Fuel is subsidized by those taxes...who uses the most fuel in this country? They are making their money because of the freedoms, the education system and the infrastructure that has been built and maintained by this country and they OWE their country for that. Now could the government use the money more wisely... ABSOLUTELY!

JohnDoe
Apr 9, 2008 at 9:27 p.m.
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Numbers can be manipulated to say whatever you want them to.

fmrjvlres
Apr 9, 2008 at 9:04 p.m.
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booner, don't be fooled by the new media. Brooks' studies (cited in that editorial you linked) are often pretty basic with questionable definitions of liberal and conservative. There are a lot of ways to 'give' to your community and if you choose other measures that people sometimes use (giving up your seat on the bus, giving money to homeless people) you can make the liberals come out ahead (maybe because they tend to live in cities where there are more opportunities to do these things). A lot of these giving studies are based on tax returns, and conservatives are more likely to report giving so they can get it deducted on their taxes. Just because it wasn't deducted doesn't mean it wasn't given - a lot of people do not deduct their charitable gifts. Fighting about who is nicer, liberals or conservatives, will get us nowhere.

Northman
Apr 9, 2008 at 8:06 p.m.
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Funny, I’ve read all the posts, and the first time the word “Lazy” occurs is when cbrltr mentions it. I don’t think anyone is trying to characterize the poor as lazy, you could make an equally good (or bad) observation about the “idle” rich. Some others were simply pointing out that one reason the rich increase their incomes faster is because they have money available to invest, and can earn returns on that which are higher than a savings account will generate. There’s no value judgment there, just a way to explain the difference.

cbrltr
Apr 9, 2008 at 7:02 p.m.
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You know it ticks me off that people (usually people who are the 'haves') classify the poor as LAZY. Like the poor don't work hard for what little they have. Walk a mile in their shoes. I'll guarantee you that most people who are considered poor or lower middle class work harder than most making the 100K plus incomes.
And keep quoting the wonderful government statistics.......remember they're the ones that have been trying to tell us for the past few years that the economy is doing just great!

NVgrf
Apr 9, 2008 at 6:19 p.m.
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booner, booner, booner............
Might there be large liberal donors living in red states? Might liberals’ higher incomes and lower charitable giving reflect the fact that they are concentrated in states with higher wages and higher costs of living?
Tossing out unsupported statistics is easy. Examining the roots of such statistics is more difficult.

janesvillegirl72
Apr 9, 2008 at 6:16 p.m.
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I find it laughable about how it has been stated that Oprah and Bill Gates work hard for their money. Oprah is by and large an entertainer, nobody and I mean nobody is interesting enough to garner that kind of wage. Bill Gates worked smart not hard. There is a certain amount of either luck or intelligence to people who are new money. They do not work harder than everyone else in this country. What about a teacher or a college professor they work their buns off and have a college degree and make hardly a living wage. I am not envious of the extremely wealthy I feel they have their own set of problems. I just want a living wage and to be able to provide for my family and maybe something to put away for retirement. Letting money do the work is the best way to accumulate wealth but most of us need that money to put gas in our tanks to get to our mediocre jobs that will never get us rich. PS I went to college, work hard and invest my discretionary income but will never be rich so please dont insinuate that only the rich work hard

booner
Apr 9, 2008 at 4:32 p.m.
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iviers77: You need to check your facts also. Conservative headed households give 30% more to charity than liberal households. Do some research sometime. You might be suprised. A recent study showed that states that voted for john kerry in 2004 gave a smaller percentage of their income than did residents of states that supported George Bush. Again, don't be fooled by the liberal media. http://www.townhall.com/columnists/Georg...

elmooso
Apr 9, 2008 at 3:46 p.m.
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Here is the addy for the Warren Buffet article and his 17% tax rate <http://www.washingtonpost.com/wp-dyn/con...> ... Also Booner, in your 11:02 a.m. post you state and I quote "I THINK NOT" that's the only thing you said that I agree with. Have a nice day!

ncpanfan
Apr 9, 2008 at 2:56 p.m.
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Booner:"The bottom line is that the amount of taxes you pay does not make a person rich or poor, neither does the president."
Great thought! I like it. I may not be rich with money but in terms of family and friends , health, having a job, a home, food to eat, clothes to wear I am truly wealthy and blessed!!!
Like I said I only complain about the taxes due to how the government wastes so much of it but I am grateful to live here and to have my freedoms. Thanks for the reminder.

ncpanfan
Apr 9, 2008 at 2:47 p.m.
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Thanks Booner. I see what you are saying. I guess the percentage of those who work the system is in the minority. I know what you are saying about the incentives, we get that in our taxes (home, charity)but there are some people who lie,and cheat to get out of paying taxes, whether they be poor, middle or wealthy...

booner
Apr 9, 2008 at 2:32 p.m.
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janesvillefirst: I completely agree with you, the goverment waste is the real crime here. Both republicans and democrats waste money. I'm not rich either. Is what got me going is some people who posted here think that tax loopholes is what makes the rich richer. It seems convenient to blame Bush. The rich get richer because they own businesses, invest money etc. They essentially make money off of their money. Is that a crime? It sounds like the American way to me. The alternative is a socialist soceity such a venzuala, Cuba and the old USSR. I don't think people in those countries are particularly thrilled with their lot in life. Like it or hate it.....the rich people in this country are the one who create jobs for the rest of us. That's not such a bad thing. Anyone has the chance to be rich in this country...thats the great thing about America. However, it requires hard work. You can't expect someone else to do it for you. People are throwing around Waren Buffett's name. I believe he came from a rather meger background....I could be wrong. Look at Obahma's story. he made his money through hard work and dedication, not a handout. The bottom line is that the amount of taxes you pay does not make a person rich or poor, neither does the president.

janesvillefirst
Apr 9, 2008 at 2:21 p.m.
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ncpanfan: I agree that some inherit (the name Kennedy comes to mind first). Growing up, (my family, 2 adults and 6 children) lived for 10 years in a two bedroom apt. My dad worked two jobs 6a to midnight. I still do not think that rich is something bad which is apparently the only purpose for such press releases being sent out.

Russ68
Apr 9, 2008 at 2:16 p.m.
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http://www.irs.gov/pub/irs-soi/05in05tr....
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Data from the IRS website. The top 50% account for %96.93 of the total income tax share. The top ONE PERCENT account for %39.38 all by themselves. Tax cuts for the "rich", really? No, tax cuts for people who actually PAY THE TAX. Don't fall for the class envy game.

ncpanfan
Apr 9, 2008 at 2:13 p.m.
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janesville: Just to make a fair argument here, I never used the word rich but did say wealthy. I wish I could be rich but probably will never happen, having grown up poor and working my way to middle class and now working to put my kids through college in the hopes that they will be better off than I ever was and yes make more money. Very questionable right now with the economy but I am hoping.
But I would like to point out that some of the "rich" people you referred to that work and invest, well some of the wealthy have never worked a day in their lives because their families were wealthy and it has been passed on to them so to be fair you must remember that. I work hard every day and pray that my husband's plant doesn't shut down because there sales are so slow thay have laid off over 100 people. We pay our bills and support our family and although we may not be rich, I am proud of how far we have come and I am proud of my kids and my middle class life.

NVgrf
Apr 9, 2008 at 2:12 p.m.
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booner....This is one definition:
"A loophole is a weakness or exception that allows a system, such as a law or security, to be circumvented or otherwise avoided. Loopholes are searched for and used strategically in a variety of circumstances, including taxes, elections, politics, the criminal justice system, or in breeches of security.
A loophole in a law often contravenes the intent of the law without technically breaking it. For example, in some places, one may avoid paying taxes to the jurisdiction by forming a second residence in another location, or a commercial property can be built in a residential zone if it is made also for residential use."
It is sort of like being a crook without really being a crook. Or being immoral while believing you are doing the right thing.

janesvillefirst
Apr 9, 2008 at 2:10 p.m.
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The two organizations who have issued this news release are always trying to create a little animosity and some class envy. If you think about it, would there be any other reason for them to bring this to our attention?

booner
Apr 9, 2008 at 2 p.m.
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I don't know that it accounts for "loopholes" and I'm not sure what that means. Many people are granted deductions such as charity contributions, mortgage interest etc. This may reduce overall percentages that you pay in the end. However, the government does this to encourage people to own homes and give to charity etc. So this is not always a bad thing. I don't know about the Warran Buffett thing. But a common example that has been in the news recently would be the Clintons. It was widely reported that they made 109 million in the last few years and they paid 33 million in taxes with 10 million they gave away. Off the top of my head, it seems like they paid 30-33% in taxes. If there were "loopholes" for the rich, I would think the Clintons would be the first to take advantage of them.

janesvillefirst
Apr 9, 2008 at 1:55 p.m.
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And the point is????? Econ 101 would tell you that "the rich" (you've got to love the pejoratives the envious use, "big oil, big corporations)that those who have more descrtionary income will probably make some investments. So, beside working for a living, they also are making money on those investments. Class envy is not an attractive personal characteristic and probably isn't going to change things much. I'm not rich, but I hope to be some day and will be proud of it.

ncpanfan
Apr 9, 2008 at 1:51 p.m.
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Booner, thanks for the info but I do have another question? Do those statistics include the tax cuts that some get which actually lowers what they end up paying in taxes percentage wise? For example like the one cited here where Buffet ended up paying 17% after all the loopholes were found?

I understand what you are saying and see your points. I guess my point is that no matter which party runs the roost, our government wastes alot of money and they get alot of my money for taxes on earnings, taxes on groceries, taxes on gas, on my electric bill, heat bill, etc... so I feel like I work to give them over half my check... My social security more than likely will not be there when I reach the new age to collect and it gets frustrating when you hear some of the things thay waste money on. The economy is going downhill and jobs are being lost but prices are going up, up and up...

booner
Apr 9, 2008 at 1:37 p.m.
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Who is telling you that rich people pay 17% in taxes. That is simply untrue. Most rich people pay 33% in taxes. I must correct my prior post about the percentages. The government's own data says the wealthiest 50% of tax payers pay 96% of the taxes with the lowest 50% paying 3.6% of taxes. The top 5% of wealthiest people pay 53.8% of all income tax and the wealthiest 1% pay 33.7% of all income tax. This is the governments own figures. It bothers me when people make statements that are not backed up with facts. People make uneducated assumptions about Bush's tax cuts because they believe what the liberal media tells. If you really want to know the facts, Do your own research. You might be suprised.

Russ68
Apr 9, 2008 at 1:36 p.m.
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A gap between the rich and the poor is a GOOD thing. It gives incentives and rewards for achievement. Without it, you have something called communism - which is an irrefutable failure.
.
To the comment about giving money to "people who need it"; giving away your own money is called "charity", giving away someone else's money is called "stealing".

ncpanfan
Apr 9, 2008 at 1:32 p.m.
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Thanks RU that is a very valid point...:O)

RUSerious
Apr 9, 2008 at 1:29 p.m.
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I do apologize. I was addressing booner.

RUSerious
Apr 9, 2008 at 1:28 p.m.
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Well boner, I think if the rich are astronomically richer than the poor, that might not be too surprising. But-what about what individuals pay? Not what a class of people pays as a whole. Your argument could reinforce the vast difference in incomes.
If 50 rich people make 1000 times more than 5,000 poor people, they may give more to the government, but not as individuals.

3BD
Apr 9, 2008 at 1:26 p.m.
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Don't get me wrong, I think it's great that Oprah, Bill Gates and others give back, that's fantastic. But they worked hard to earn that money and I'm sure sacrificed a lot to get it. They should not be expected to give back just because they have an abundance of it. Rupert Murdoch earned his money and has the right to do with it what he wants. He should not be expected to give it away.

ncpanfan
Apr 9, 2008 at 1:22 p.m.
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Booner, Are you saying that if you add up all the taxes that middle class and the poor pay that it is still less than what the wealthy pay? I would like to see the reports that show this if you don't mind. I am not saying that they don't pay alot, it just is the fact that when I pay 30% to the government and they pay 17% I can't understand it. Then factor in that almost everything I buy after my paycheck is taxed is also hit by taxes... so I am thinking our government is reaping most of the benefits from my paycheck. Now before you say I am bashing our government please keep in mind that I am only bashing how wasteful they can be with all the taxpayers money!

booner
Apr 9, 2008 at 1:18 p.m.
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Treasury Department analysts credit President Bush's tax cuts with shifting a larger share of the individual income taxes paid to higher income taxpayers. In 2005, says the Treasury, when most of the tax cut provisions are fully in effect (e.g., lower tax rates, the $1,000 child credit, marriage penalty relief), the projected tax share for lower-income taxpayers will fall, while the tax share for higher-income taxpayers will rise.

booner
Apr 9, 2008 at 12:58 p.m.
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Do some research......the wealthiest 3% pay 90% of the taxes in this country. You want to still try and say the poor and middle class fund this government? Again, blaming other people for your problems won't make you any richer......

Northman
Apr 9, 2008 at 12:54 p.m.
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From the griping, I guess a lot of folks would prefer to live in a country where the rich get poorer instead of richer. Why bother to work hard, why bother to work at all, let’s have everybody live in abject poverty and we’ll all be equal. If you feel that strongly about it, there are plenty of countries you can move to and make your dream come true. Note too that while the rich may be getting richer, so is everybody else.

As for the Bush tax cuts, unless Congress acts they phase out in 2010. When that happens, most of us will see our taxes jump up by 25% or so. Take a look at the deductions on your next check stub, and figure out if that will impact your quality of life. If so, you must be rich, because the tax cuts only benefitted the rich!

Oh, and before you start kneeling down and worshipping Warren Buffet, consider the fact that he pays so little in tax because he pays thousands, if not millions, of dollars every year to the country’s best tax accountants who find every possible loophole for him. He could, instead, pay that same money to the treasury, but it flatters his Hindenburg-size ego to sermonize to the rest of us. Look to Buffet for investing advice, not ideas about the tax code.

jviers77
Apr 9, 2008 at 12:50 p.m.
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booner, you're wrong. The taxes paid by the people in the middle class and lower fund the government. Just because you make more money than others does not entitle you to pay a lesser percentage of your income to taxes. Wealthier people always wonder why people of more modest incomes don't like them. It's not envy, it's because wealthier people treat their money as their "precious" and will find every loophole and technicality to keep it. There is no reason a person making millions can't pay 30% of their income to taxes like the rest of us. They'd still have more than enough to buy all their toys and vacation homes and SUV's. It's your attitude toward the middle class and working poor is exactly why there is such a class division in this country. At least people like Oprah, Warren Buffett, and Bill Gates give back many of their millions to people who need it. When was the last time Rupert Murdoch donated money to a worthy cause? No, the Republican Party does not count.

nyconserv1
Apr 9, 2008 at 12:34 p.m.
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Wow another article about class envy. This is what the dumbing down of education has given us. even though it is proven, tax cuts get more money to the treasury and help the economy, there will always be democratic party sycophants that bash the producers of this great country.

chelleandlou
Apr 9, 2008 at 12:08 p.m.
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Oh what a shocker!!!!!!!!!! This can't really surprise anyone I wouldn't think.

ncpanfan
Apr 9, 2008 at 11:45 a.m.
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And also the taxes we all pay funds this government and might I say alot of it is wasted!!!

ncpanfan
Apr 9, 2008 at 11:42 a.m.
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We are middle class and we do what we can with our money but when you pay so much out for gas, heating costs and groceries on top of your monthly bills and then factor in paying for college because we make too much money for help but not enough to be able to afford it what exactly are we supposed to do with our money? Before you think it is alot, we make $70,000 a year between the two of us before taxes! I know we are paying more than 17% taxes.... Next year we have a second child to put through college. We haven't always been middle class either. We started out making like $7 an hour each when we first were married and continued for years. It is hard to save money when you live paycheck to paycheck. We didn't go to college, couldn't afford it and that is why we want our kids to go.

elmooso
Apr 9, 2008 at 11:36 a.m.
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Booner..no one is saying Bush's tax cuts causes poor people or that poor people are blaming anyone.. Bush's tax are are grossly unfair.. when Warren Buffet even says it's absurd that his tax rate is lower than a janitor's I think I'll listen a brilliant man like him and dismiss the dwindling few disciples of the worst president in modern times.

cocktail848
Apr 9, 2008 at 11:27 a.m.
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It is because the rich now how to make money work for them and realize what an asset and a liability is. Even the middle class don't know how to work with money. The key is to have money coming in without you having to be there. Also, the biggest misconception with the middle class is that a house is an asset. It really isn't because it costs you money. If it were a rental property, that is different.

booner
Apr 9, 2008 at 11:02 a.m.
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Lets say poor people had to pay no taxes at all. Would that suddenly make them rich? I think not. Poor people need to stop blaming others for their problems and using this tired old argument that Bush's tax cuts have caused this. The taxes that rich people pay is enormous and funds this government and country.

elmooso
Apr 9, 2008 at 10:15 a.m.
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A big reason the rich are gaining faster are Bush's tax cuts that favor them. Warren Buffet the richest man in the world paid 17.8% total tax last year.. his secretary paid 30% even the janitor in his building paid a higher rate than he did.. Buffet himself said that this is absurd. This administration has allowed the richest people to loot the treasury and our children and grandchildren are going to have to pay for it.

booner
Apr 9, 2008 at 9:54 a.m.
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Perhaps this is because rich people are more likely to have gone to college, took the risk to start a business etc. People need to take responsibility for their own lot in life and stop blaming others for the poor decisions they have made.

RUSerious
Apr 9, 2008 at 9:23 a.m.
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A similar article in the national news right now, found here: http://money.cnn.com/2008/04/09/news/eco... describes the different income brackets this way: The average income of the bottom fifth of families was $18,116; the middle fifth, $50,434; and the wealthiest fifth, $132,131.

Opinionsforfree
Apr 9, 2008 at 9:14 a.m.
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How are they defining "Rich"?

jviers77
Apr 9, 2008 at 8:45 a.m.
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I'm not surprised. This won't change any time soon.

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