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The findings are striking because the most commonly cited economic statistics — such as per capita gross domestic product — continue to show that the United States has maintained its lead as the world’s richest large country. But those numbers are averages, which do not capture the distribution of income. With a big share of recent income gains in this country flowing to a relatively small slice of high-earning households, most Americans are not keeping pace with their counterparts around the world.

“The idea that the median American has so much more income than the middle class in all other parts of the world is not true these days,” said Lawrence Katz, a Harvard economist who is not associated with LIS. “In 1960, we were massively richer than anyone else. In 1980, we were richer. In the 1990s, we were still richer.”

That is no longer the case, Professor Katz added.

Median per capita income was $18,700 in the United States in 2010 (which translates to about $75,000 for a family of four after taxes), up 20 percent since 1980 but virtually unchanged since 2000, after adjusting for inflation. The same measure, by comparison, rose about 20 percent in Britain between 2000 and 2010 and 14 percent in the Netherlands. Median income also rose 20 percent in Canada between 2000 and 2010, to the equivalent of $18,700.

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Of course, ordinary Americans also are eligible for preferential tax rates on dividends and capital gains, and for most of us they remain at 15 percent. The catch is that few of us have a lot of investments in taxable accounts and therefore derive little benefit from those breaks. In 2011, the average taxpayer earning less than $500,000 received just 2 percent of his or her income from dividends and long-term capital gains. Most of that money went to people earning more than $100,000.

Most ordinary Americans, if they have investments that produce dividends and capital gains, have them in tax-deferred retirement accounts, either individual retirement accounts or 401(k) plans. When they draw out the income from those accounts, they will pay ordinary income tax rates, regardless of whether the profits came from dividends and capital gains.

If Congress ever gets serious about increasing tax revenue enough to pay for the spending bills it passes, the big tax advantage given to unearned income may have to be reduced, if not eliminated. Eliminating it would mean that the private equity executives who manage to pay very low tax rates — because they classify their salaries as capital gains — would be taxed like the rest of us. The “carried interest” issue would vanish.

This year, that tax advantage has been reduced, even if only for some of the highest-paid Americans. It is a start toward a tax policy that no longer discriminates against people who have to work for a living because they do not have dividend checks to support them.

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The concentration of income and wealth is deepening around the world, driven by more than rising paychecks for top American financiers and chief executives. Returns to invested capital are outstripping economic growth across advanced countries, directing a growing share of economic rewards into the hands of the wealthy.

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“So does reducing inequality through redistribution hurt economic growth? Not according to two landmark studies by economists at the International Monetary Fund, which is hardly a leftist organization. The first study looked at the historical relationship between inequality and growth, and found that nations with relatively low income inequality do better at achieving sustained economic growth as opposed to occasional “spurts.” The second, released last month, looked directly at the effect of income redistribution, and found that “redistribution appears generally benign in terms of its impact on growth.””

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The divergent public views on pay are particularly odd, since today’s excesses are more often in Silicon Valley. When the sequel to the movie “Wall Street” was filmed a few years ago, it was in Eric Schmidt’s apartment, not at a Wall Street executive’s. Mr. Schmidt, by the way, was reported by Business Insider to have a “fabulous life” with a Gulfstream V, a 195-foot yacht and multiple homes across the country including a new $22 million Hollywood mansion. You could write similar things about Google’s co-founders.

Imagine if Mr. Dimon or Mr. Blankfein lived so ostentatiously? Wall Street is certainly known for its high-end consumption, but it is also a place where being conspicuous about it is frowned upon. In Silicon Valley, however, the superwealthy can flaunt their toys and no one says a word.

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It’s a 50/50 split of America’s GDP (or Gross Domestic Product). GDP is the officially recognized monetary value of all goods and services produced by a country within 1 year.
So what this map is showing that 50% of all the money generated in the United States comes from a tiny proportion of the country in geographical terms. It is of course much more of an even split in terms of population.

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The Pew report found that the wage premium for having a college degree was at a record high. The median annual wage for young college-educated workers now is $45,500, compared to $28,000 for high school graduates — a gap of $17,500. In 1965, the gap was much smaller: $7,400. (All the figures are in 2012 dollars.)

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It has always been clear that health reform will induce some Americans to work less. Some people will, for example, retire earlier because they no longer need to keep working to keep their health insurance. Others will reduce their hours to spend more time with their children because insurance is no longer contingent on holding a full-time job. More subtly, the incentive to work will be somewhat reduced by health insurance subsidies that fall as your income rises.

The budget office has now increased its estimate of the size of these effects. It believes that health reform will reduce the number of hours worked in the economy by between 1.5 percent and 2 percent, which it unhelpfully noted “represents a decline in the number of full-time-equivalent workers of about 2.0 million.”

Why was this unhelpful? Because politicians and, I’m sorry to say, all too many news organizations immediately seized on the 2 million number and utterly misrepresented its meaning. For example, Representative Eric Cantor, the House majority leader, quickly posted this on his Twitter account: “Under Obamacare, millions of hardworking Americans will lose their jobs and those who keep them will see their hours and wages reduced.”

Not a word of this claim was true. The budget office report didn’t say that people will lose their jobs. It declared explicitly that the predicted fall in hours worked will come “almost entirely because workers will choose to supply less labor” (emphasis added). And as we’ve already seen, Mr. Elmendorf did his best the next day to explain that voluntary reductions in work hours are nothing like involuntary job loss. Oh, and because labor supply will be reduced, wages will go up, not down.

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“Gig City,” as Chattanooga is sometimes called, has what city officials and analysts say was the first and fastest — and now one of the least expensive — high-speed Internet services in the United States. For less than $70 a month, consumers enjoy an ultrahigh-speed fiber-optic connection that transfers data at one gigabit per second. That is 50 times the average speed for homes in the rest of the country, and just as rapid as service in Hong Kong, which has the fastest Internet in the world.

It takes 33 seconds to download a two-hour, high-definition movie in Chattanooga, compared with 25 minutes for those with an average high-speed broadband connection in the rest of the country.

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