STANFORD, Calif. | It was either Adolf Hitler or his propaganda minister, Joseph Goebbels, who said that the people will believe any lie, if it is big enough and told often enough, loud enough. Although the Nazis were defeated in World War II, this part of their philosophy survives triumphantly to this day among politicians, and nowhere more so than during election years.

Perhaps the biggest lie of this election year, and the one likely to be repeated the most often, is that the income of "the rich" is going up, while other people's incomes are going down. If you listen to Barack Obama, you are bound to hear this lie repeatedly.

But the government's own Congressional Budget Office has just published a report whose statistics flatly contradict this claim. The CBO report shows that, while the average household income fell 12 percent between 2007 and 2009, the average incomes for the lower four-fifths fell by 5 percent or less, while the average income for households in the top fifth fell 18 percent. For households in the "top one percent" that seems to fascinate so many people, income fell by 36 percent in those same years.

Why are these data so different from other data that are widely cited, showing the top brackets improving their positions more so than anyone else?

The answer is that the data cited by the Congressional Budget Office are based on Internal Revenue Service statistics for specific individuals and specific households over time. The IRS can follow individuals and households because it can identify the same people over time from their Social Security numbers.

Most other data, including census data, are based on compiling statistics in a succession of time periods, without the ability to tell if the actual people in each income bracket are the same from one time period to the next. The turnover of people is substantial in all brackets -- and is huge in the top 1 percent. Most people in that bracket are there for only one year in a decade.

All sorts of statements are made in politics and in the media as if that "top one percent" is an enduring class of people, rather than an ever-changing collection of individuals who have a spike in their income in a particular year, for one reason or another. Turnover in other income brackets is also substantial.

There is nothing mysterious about this. Most people start out at the bottom, in entry-level jobs, and their incomes rise over time as they acquire more skills and experience.

Politicians and media talking heads love to refer to people who are in the bottom 20 percent in income in a given year as "the poor." But, following the same individuals for 10 or 15 years usually shows the great majority of those individuals moving into higher income brackets.

The number who reach all the way to the top 20 percent greatly exceeds the number still stuck in the bottom 20 percent over the years. But such mundane facts cannot compete for attention with the moral melodramas conjured up in politics and the media when they discuss "the rich" and "the poor."

There are people who are genuinely rich and genuinely poor, in the sense of having very high or very low incomes for most, if not all, of their lives. But "the rich" and "the poor" in this sense are unlikely to add up to even 10 percent of the population.

Ironically, those who make the most noise about income disparities or poverty contribute greatly to policies that promote both. The welfare state enables millions of people to meet their needs with little or no income-earning work on their part.

Most of the economic resources used by people in the bottom 20 percent come from sources other than their own incomes. There are veritable armies of middle-class people who make their livings transferring resources, in a variety of ways, from those who created those resources to those who live off them.

These transferrers are in both government and private social welfare institutions. They have every incentive to promote dependency, from which they benefit both professionally and psychically, and to imagine that they are creating social benefits.

For different reasons, both politicians and the media have incentives to spread misconceptions with statistics. So long as we keep buying it, they will keep selling it.

Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His website is www.tsowell.com.

(37) comments

dorkynewspaperreader
dorkynewspaperreader

Haha, this is funny. Sooo, if income disparity is a giant lie propagated by the Obama Administration, then that means everyone's incomes are actually becoming more similar? Actually, kudos to you Sowell for not bringing up socialism in every other sentence.. But... wait.... what are you complaining about again?

ZAR
ZAR

Here it is in black and white for you neo-cons who scream about the deficit.
We have a deficit and spending cuts alone will not fix it. The wealthiest 1 percent can afford to pay much higher income taxes than they currently do, as opposed to the middle class who are already squeezed as far as possible.
Do the math and stop whining about class warfare, that statement when it comes to our progressive tax structure is nothing less than childish ranting.!

Bobbie
Bobbie

ZAR just how much of the deficit or debt will taxing rich people more cover? Or how about this. If you and Obama take all the money from the big bad rich guys, how many days would it pay for on the deficit. 30 days at the most? One month...big deal. But in turn all that money you take out of the economy via this raise in taxes, and give to the feds to waste, will cause jobs to be lost and the economy to slow down more. I don't think Obama can handle slowing down the economy anymore than he has aleady. This "tax the rich more" ploy is just a way for the dems to buy more class warfare votes. But the thinking person out in flyover land sees right through that scam. And ZAR it is the thinking man in flyover land that Obama needs to win the vote of to win in november. He already has the "touchie feelie tax the rich guy more" crowd behind him.

StopProgStop
StopProgStop

These tax cuts are set to expire. We don't have to raise taxes on the rich. It's going to do it on it's own.

And the 'rich people taxes won't pay off the deficit this year so why raise taxes on them' argument is ridiculous at best. We need multiple things to help balance the budget to get the debt in check. Many things. So 3.6% on everyone making over 250K isn't a big step but it is a step in the direction of fiscal balance. Get over it.

Bobbie
Bobbie

StopProgStop "We need multiple things to help balance the budget to get the debt in check. Many things. So 3.6% on everyone making over 250K isn't a big step but it is a step in the direction of fiscal balance. Get over it."

Here is another suggestion to get the debt and deficit under control. Stop throwing our money out the window on stimulator bills and failures like Solyndra. That would be over a Trillion dollars we would not owe now.

Buldog
Buldog

How about stop passing bills to reduce fairy dust?

Bobbie
Bobbie

Good one Buldog. If all else fails bring up something from the past that has nothing to do with the subject. Fair dust...good one. Sounds like a liberal progressive cure all.

Buldog
Buldog

bobbie, are you referring to your post that I commented on where you say something from the past that has nothing to do with the subject? Also, when you said "Fair dust (I am sure you meant fairy dust )...good one. Sounds like a liberal progressive cure all", you are incorrect again. I know you do not believe in facts but it was actually a republican cure all, (H.R. 1633) that was sponsored by none other than No Show NOem.

702

Buldog
Buldog

But you have no problem with romney giving more tax cuts to himself and the rest of the 1% while raising BOBBIES taxes. It has been proven over and over that your trickle down theory is a failure but you most of the republicans what to continue having the middle class fall into the class of the poor. Tell me what makes sense about that?

Bobbie
Bobbie

Oh trickle down theory like Obama's trickle down tax benifit theory. Like how the more you tax out of the economy the more the feds can use it to waste on such things as GSA and Solyndra? Now I get it.

Jim Stewart
Jim Stewart

Soak those filthy rich people and tell me how your life is improved? The economic education in this country must consist of rich people bad, poor people good.

Buldog
Buldog

Tell me how the rich soaking the poor and middle class has helped? Tell me what is wrong with this picture, 6 members of one family control more wealth than 49 million Americans.

Bobbie
Bobbie

How are the rich soaking the poor and middle class?

lzross
lzross

Gee bobbie, come on now. Take a look at your wages and then compare that to, say Sioux Falls or Omaha or Minneapolis. Take a look at how the social programs that feed the poor are being taken away by the rich. Take a look at how other safety nets have disappeared by the rich. So, how are the rich doing this, you may ask? By not paying their taxes. Your standard bearer has off shore accounts that he does not pay tax on. He made the moolah here, but will not pay tax. In fact, we know little to anything if he even paid income tax at all. He will not show the returns. When you have a system that is this unbalanced, there is only one group that is proven to be the culprit, the rich. I have read your posts and have responded to some of them. In your posts, you declare that you are just a working stiff like the rest of us. Where in the world do you see yourself in backing the people who are stealing you blind? Oh, I guess I answered my own question, perhaps that is the problem.

How about this? Why don't you take a month off and go to Europe or Hong Kong and have some fun? Do you know why you cannot take time off from your work anymore for a much needed vacation? If not, check out the rich and fameous and what they are doing, that is all courtesy of the middle class and even the poor. I know that you are in the tea party, but geez, why are you insisting on cutting your own throat? Most folks today have more than one job to make ends meet, how many do the rich have? Most folks today are just trying to get into the middle class, which is what Bobbie? How much do you think you need to make to even be in the middle class?

ApathySlayer101
ApathySlayer101

Izross sounds as if you've been gulping down the Kool Aid this current administration has been serving. The class warfare debate is to distract people from the real, very serious problem of our government spending more than they can collect. If you sway the minds of general public with an issue, a goal is much easier to accomplish....especially if it involves handing over more of your earnings for taxes.
First find a credible source for the numbers our government is actually spending (CBO, etc) and see what you come up with. It's astonishing when you see the numbers broken down by the day and estimated hours and minutes with spending. You'll discover that soaking the 'rich' to the point of poverty will not put a dent in finding a solution. If you want to witness the consequences of ignoring the consequences take a real serious look into the State of California and their problems with spending. The results are crystal clear.

open-i
open-i

Izross......prove it, don't just spew your words...give us some proof that the rich are taking these programs away.....what is wrong with the rich putting money in off shore accounts? Is it illegal? If not then what are you complaining about? BTW if you think Romney is the only one with an offshore account you are really in need of some education......He isn't showing the returns, neither are Reid or Polosi or any of them, why do you choose to sit and gripe about him but then not force your standard bearers to ante up as well?

You say all of the rich do is go to europe and party on middle classes backs? Make some sense please, If they got their wealth from their parents or inheritance...well good for them they are luckier than you or I....if they busted their butt or invented something that made them rich....well good for them they are smarter or luckier than you or I.....But I cannot see how sitting here like chatty Kathy's whining about how someone else is rich and i am not is going to help anything. This is one of the few countries in the world that you and I have a small chance to become rich, but you can't whine your way there...you gotta work hard unless you are really lucky to get there...and i'd prefer if i do actually get there someday from all the hard work I do....that it doesn't all be given to the welfare mom's out there or people like you that envy me but aren't willing to put in the work......

Jim Stewart
Jim Stewart

OK Buldog - soak 'em. heck, you probably want them penniless and begging you for their lives. Envy is a terrible way to live.

Buldog
Buldog

No, I am not a republican.

open-i
open-i

Which has what to do with it cornfrog? Oh you are part of the lump everyone in a group if they don't type or think what you think......N.A.Z.I. does sound about right now huh....

StopProgStop
StopProgStop

Not about soaking anyone. It's about if i pay X% and you pay 1/2X% that would appear to be unfair.

open-i
open-i

Serious? 1/2x%? pretty sure if you want to talk about it you should at least know what you're talking about. They not only pay more but pay a higher percentage of tax then you do....unless you are part of the 1% and if you are and feel bad, then break out your checkbook and give your wealth to a charity....but don't try to force others to follow you....

StopProgStop
StopProgStop

Percentage is percentage. 13.9% paid on 20 million is still 13.9%. I paid closer to 28%. And yes i know what I'm talking about. 15% on capital gains.... do you know what you are talking about? Asking the top marginal tax rate to go from 36% to 39.6% isn't the end of the world. The average CEO makes 300X their average employee. Want more descriptions of the increased income gap?

Best part about it is the congress won't get their stuff together and it will expire and they won't have to do anything. Increase revenue and decrease spending. The only way to cut away the deficit. Remember what fiscal responsibility is?

Bobbie
Bobbie

The jealousy just oozes from the left. So since you on the left make more than someone poorer than you, does that set the guidelines for you to pay more in taxes?

Buldog
Buldog

Have you ever noticed that no matter how embarrassingly stupid the next generation of the one percenter's become, they still stay filthy rich? That is because they are not taxed on their wealth until death and as romney has shown us, they shelter their income in offshore accounts to avoid paying U.S. taxes.

Buldog
Buldog

I wonder if sowell is aware of the fact that the wealth held by the six Walton (walmart) family members was equal to that of the bottom 30.5 percent of families in the U.S. in 2007 but that in 2010, the Waltons’ share of wealth equaled the entire bottom 41.5 percent or nearly 49 million U.S. families.

Today there are 26 conservative billionaires who have become the lifeblood of the Republican Party. They pick the candidates. The right wing billionaires buy the ads, and when their candidates are elected, they pass the legislation. Conservative billionaires own and operate the Republican Party but they are greedy, they want to own the United States.

Buldog
Buldog

I would suggest that mr sowell should read the CBO report further. Although the detailed data that form the basis of CBO’s estimates in this report are available only through 2009, other data can provide some insight into more-recent changes in the distribution of income. Those data suggest that income for households toward the higher end of the distribution increased more rapidly than income for households elsewhere in the income distribution in 2010. And let's not forget that the top incomes increased about 400% from 2000 to 2008, while everyone else's flatlined.

Potatoes Browning
Potatoes Browning

I'm really wonder why the RCJ keeps publishing this person. Week after week of fact less garbage. The only reason i can come up with is that this person must be a troll. As to responding to facts, there are no facts presented here....if there were any logic to the statement then one could rebut such statements but why bother. So are we to believe that the middle class is doing just fine and the rich are not getting richer, and if we don't accept this then we are some kind of fascist? Plate fulls of steaming tripe there Bat Boy....Do us a favor, and find something better!!

Chase81
Chase81

I love all of these comments about how Sowell is telling lies and then no one actually points out any lies. Apparently lies to many people means stuff they disagree with or just simply don't want to believe.

lzross
lzross

This feller is what we call a tall tail teller. Why didn't he just pull numbers from the 90's? Here is what Mr. Sowell and the other tall tail tellers want you to know,

"For different reasons, both politicians and the media have incentives to spread misconceptions with statistics. So long as we keep buying it, they will keep selling it."

His own words finally make some sense of it all, now will he follow his own advise and stop? Nope, he gets that 1% moolah and that is more important than the truth.

Buldog
Buldog

Romney plans to keep the rich getting richer and the middle class getting poorer.

A recent report by the centrist Tax Policy Center found that Romney's tax cuts would boost after-tax income by an average of 4.1 percent for those earning more than $1 million a year, while reducing by an average of 1.2 percent the after-tax income of individuals earning less than $200,000.

I'm wondering if a right-winger can explain their disjointed logic about wanting lower taxes, but at the same time complaining that middle and working class families (of which 99% of them are apart of) don't pay enough, and should have higher taxes. I'd also like them to explain why they have so much disdain for the "47% who don't pay any income taxes," and then in the same breath...complain that "taxes = tyrannny"....sounds like class envy to me.

Posey
Posey

--"people will believe any lie, if it is big enough and told often enough, loud enough."and that is especially true if it's a lie they want to hear--And that truism has made folks like Sowell, Thomas, Krauthammer, O"rally, Hannity , Limblaugh, etc. etc. filthy rich.... And it's wrecking the country.
+

Danger
Danger

Typical liberals. Cite undeniable facts to them from the same government that they depend on for their very existence, and they still can't believe it. All because they have been stirred into a frenzy by the Community Organizer, spewing his class envy agenda every chance he gets.

metafirma
metafirma

This guy, once again, demonstrates that he's an idiot and a partisan hack along with being a major source of the problem he references... a liar, repeating lies, fabrications and distortions. The proof is undeniably in the pudding - an objective analysis (by non-partisan hacks!) of the past 5 years financial reporting lays it bare as to exactly how it really is: the middle class got screwed and the wealthy feathered their nest handsomely. Get this lying hack out of the RCJ.

Black Hawk
Black Hawk

The word N.a.z.i. isn't profanity. Check you computer program and the dictionary.

Black Hawk
Black Hawk

It's always good to start your column with Hitler and then start telling lies. Middle class income has been flat for the last 10 years. The top 1% have seen their incomes rise dramatically, so who is telling the truth, you or Hitler? Between 1979 and 2007, the median family income rose 35%. During the same period the top 1%'s income rose 278% and that is the truth.

StopProgStop
StopProgStop

Ahhh starting with Hitler then making a counterpoint that isn't even on the same planet as the rest of us.
2007-2009 who cares what the top lost? What was the increase of the top 5% salary's prior to 2007? For the 30 years prior? What is the typical CEO's income v. his average employee salary? Com'on Thomas Sowell. Think, instead of cherry picking a few years of numbers during bad economic times, to fight truths.
Those Republican rose colored glasses say "hey we're hurting too! Feel bad for us."

ResearchIt
ResearchIt

Are you serious Tommy? Of course when you pick 2007-2009 this is the result you will get. Every economic class slides to some degree when there is a bad recession. Particularly in one where there is a precipitous decline in housing values and stock portfolios. If the value of these assets are falling then of course the people that own the most assets will take a bigger hit. What about 2000-2012, or 1980-2012?

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