I was called to present evidence for my contentions in the post on American vs. European Social Models. Although no one used the word “numbers,” that is what they provided as counter-evidence, so I expect that is what is required. I have a real problem with citing numerical data as it quickly becomes a nearly infinite regress to interpretation, methodology, who might be funding the research, and what agenda the person(s) conducting the research may have, etc. It is also quite common that numerical evidence is incomplete, skewed towards political policies or agendas, or inadvertently misleading. Moreover, there is a lot of evidence that simply does not lend itself to presentation in numerical form.
So the numbers I present below are provided rather grudgingly, lest I be accused of dreaming up my arguments out of thin air. I am probably no better than others with respect to giving evidence to support my contentions; I obviously went in search of things that support my agenda and discarded or ignored other evidence. That’s my point about our fetish for numbers: they may not prove very much in the end.
Three of my contentions in my earlier post and comment drew particular disagreement: tax rates, social mobility, and housing. I’ll address each in turn.
I said, “the rich and powerful, who stand to gain from tax rates lower than those in Europe and lower than U.S. tax rates from the 1960s, say, have succeeded in flattening the U.S. tax structure.” Bazzer said, “When Reagan left office, the top marginal rate was 28%. It’s now 35%, even after Bush’s radical ‘tax cuts for the rich.'”
To begin, the marginal rate refers to the Federal income tax rate paid to the IRS, which even now is probably the most progressive of the many taxes levied. Paragraph 2 of this link provides that the top rate in 1980 was 70% but has dropped since then (end date unclear) to 36%. Those numbers flatly contradict Bazzer’s numbers. Further, this chart demonstrates that the top 1% received the lion’s share of the benefit. I consider that an obscenity.
A better measure of the tax burden is what’s frequently referred to as the “effective tax rate.” It includes both progressive and regressive taxes. That number has remained remarkably stable across the board for some time. The second graph in Fig. 1 of this site shows where the numbers stand for each quintile in 5-year intervals since 1979. The data comes from the Congressional Budget Office. This chart shows the same thing. The convergence (flattening) occurred in the early to mid-1980s. It has since widened again. So I’m wrong that flattening has continued unabated.
What troubles me more is the first graph of Fig. 1, which demonstrates a precipitous rise in income for the top quintile. This chart shows the same thing. Although I did not cite the widening rich-poor gap, that is probably what I had in mind when I said “flattening.” It reflects how tax and commercial structures in the U.S., far from favoring the middle or bottom, heavily favor the top. There is nothing progressive about that. It is a commonplace observation that it takes money to make money; that is shown in by the dramatic results in the numbers provided.
I claimed that social mobility is a myth perpetrated on the poor. The study found at this link has among its principal findings that “[i]nternational comparisons indicate that intergenerational mobility in Britain is of the same order of magnitude as in the US, but that these countries are substantially less mobile than Canada and the Nordic countries.” Further, this article from the Wall Street Journal pointedly compares the U.S. and Europe in the subtitle and callout beside the first paragraph. Its conclusion matches my contention.
In my comment, I cited the rise of the McJob and said of the middle and lower classes that “[h]ome ownership is a far-off dream.” Bob Hayes provided that “69% of Americans … own their own home, or live in a home owned by their family. (Source: Census Bureau)” That is intended, I believe, as an indication that folks are managing pretty well.
Reasonable housing costs are conventionally considered within one’s budget when they account for one-fourth to one-third of gross income. The chart at the very bottom of this page at the Census Bureau indicates that the median mortgage in 2004 was $1,212 and median rent was $694. Out of those with a mortgage, fully 32% of owners pay 30% or more of income for housing. (It is unclear whether that accounts for more than the mortgage.) For renters, it is 48%. I take those numbers to indicate that there are a lot of folks overextended in paying for housing. This article articulates many of the same points as above, including that the “poor entered the 1970s spending 30 percent of their income for housing; by 1995, they paid 58 percent.” That is a serious burden. ABC News also has an article on the subject supporting the same points.
Considering that nearly half of renters are overextended and that the out-of-pocket cost for a mortgage is almost double, I would say that home ownership being a far-off dream for many is pretty accurate. That difficulty is visited upon a far greater number, I daresay (supported by the numbers above), than the 20% Bob Hayes dreamt up.
Bob Hayes also wrote that “[t]wo-incomes to get to the same standard of living we had in 1965? … The trendlines all head in the good direction for 80% of Americans.” This link with data drawn from the U.S. Bureau of Labor Statistics provides the same contention as mine: “Why were women joining the workforce in greater numbers? Because their husbands’ earnings have been generally declining since 1973, and families have had to form two-paycheck households to maintain their parents’ standard of living.” Bob’s contention that we expect more now (electronics and multiple subscriptions to service providers, for example) is probably true, but then it only makes sense to compare ourselves to contemporaneous standards. Try getting milk delivered to your doorstep the way our parents did.
So did I prove anything? No, probably not. But there is clearly plenty of evidence out there in support of my perspective. The counter-arguments went pretty far afield, bringing in voting characteristics, unemployment rates, and of course a call for evidence. There was little or no discussion of the heart of the issue, which is the relative inhumanity of the U.S. in its refusal to care for its own in comparison to most European countries’ insistence upon it. Whether Europe can sustain that orientation remains to be seen. Its way of life is no more or less imperiled than our own for a variety of complex reasons, many of which go far beyond the scope of this post.