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Thursday, June 21, 2012

America’s long slope down | David Cay Johnston

Reuters columnist David Cay Johnston is the president of Investigative Reporters & Editors (IRE), an education organization with 4,200 members. A 13-year veteran of The New York Times, David won the Pulitzer Prize in 2001 for enterprise reporting that uncovered loopholes and inequities in the U.S. tax code. He wrote the best selling tax books Perfectly Legal, which won an IRE medal, and Free Lunch. His latest book, The Fine Print: How Big Companies Use "Plain English" to Rob You Blind, will be published in September.

A broad swath of official economic data shows that America and its people are in much worse shape than when we paid higher taxes, higher interest rates and made more of the manufactured goods we use.
The numbers since the turn of the millennium point to even worse times ahead if we stay the course. Let’s look at the official numbers in today’s dollars and then what can be done to change course.
First, incomes and jobs since 2000 measured per American:
Internal Revenue Service data show that average adjusted gross income fell $2,699 through 2010 or 9 percent, compared to 2000. That’s the equivalent of making it through Thanksgiving weekend and then having no income for the rest of the year.
Had average incomes just stayed at the level in 2000, Americans through 2009 would have earned $3.5 trillion more income, the equivalent of $26,000 per taxpayer over a decade. Preliminary 2010 data show a partial rebound, reducing the shortfall by a fifth to $2.8 trillion or $21,000 per taxpayer.
Wages per capita in 2010 were 4.3 percent less than in 2000, effectively reducing to 50 weeks the pay for 52 weeks of work. The median wage in 2010 fell back to the level of 1999, with half of workers grossing less than $507 a week, half more, Social Security tax data show. The bottom third, 50 million workers, averaged just $116 a week in 2010.

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