Strengthening Constitutional Self-Government

No Left Turns

The Myth of the Top One Percent

Thomas Sowell points to the transient nature of the nation’s top one percent of income earners and--in so doing--also points to the deceptive nature of most public discussion of the top one percent as a permanent oppressor class. Leaving aside the question of oppression from the super-rich, the fact is that people move in and out of income brackets all the time. The highest levels of fluctuation occur at the top and at the bottom. Few remain in the top for longer than a decade; just as few remain permanently on the bottom.

Sowell quotes Anna Quindlen by way of segue to this point. Quindlen, in an article for Newsweek lamented that, "the share of the nation’s income going to the top 1 percent is at its highest level since 1928." I cannot resist pointing to her choice of words in this lament. The "share" of the "nation’s income" going to the top one percent distresses her? It distresses me that she thinks it’s the "nation’s income" and that the nation should have any thought about what "share" of it goes to anyone. It’s the "nation’s" income? What did "the nation" do to earn it? And how do we get a share? By the graces of some magic pie slicer in the sky? No matter how big the pie, I guess the kids will still fight over who got the bigger slice. (I know mine do.) Isn’t that why it’s a good idea get the government out of the pie baking and pie slicing business? After centuries of this kind of fighting, the smart kids who founded our country figured out that the only pie worth eating is the pie one learns to bake for himself. Then you don’t have to fight anyone for a piece and you don’t have to worry about the size of your neighbor’s pie (unless you’re amused and inspired by that sort of sport). You can always try to bake a better one next time if yours doesn’t suit. Whatever its size and whatever its flavor, you can take pride in your own pie and rest assured it is--at least--undoubtedly better than the crumbs that would be thrown your way if there were only one pie to be doled out by your "betters," a.k.a., the experts. In America there isn’t just one big pie for all of us greedily to nibble upon. There’s roughly 300,000,000.

Discussions - 12 Comments

It is a rather atomized view of things, to go from Lasch to Sowell, to suggest 300 million pies, to fold so quickly to the notion of individual entitlement to the fruits of ones own labor.

We had an excellent presentation at our school about this notion of "generational poverty". People who have gone through several generations of welfare expect the government to give them things...they know when they can be late on their electric bills, they expect to be given money for their food, they basically expect, and without shame take money for doing nothing. People who are temporarily poor due to a lost job, or other traumatic event tend to refuse handouts and work hard to get back on their feet.

I personally feel that government should stop handing out money to people who do not do anything but sit at home all day. Our welfare system is a shambles. Even FDR made people work for his programs. I see too many students who have grown up in the welfare system just expect things.

According to the numbers, it's wrong to say that "the highest levels of fluctuation occur at the top and the bottom." In fact, the top and the bottom have the lowest levels of fluctuation. According to the same IRS report that Sowell cites, here is the data on the percentage of each quintile that stayed where they are:

lowest fifth: 42%

second fifth: 33%

third fifth: 33%

fourth fifth: 40%

top fifth: 69%

Looking also at the top 1%, 88% stayed in the top quintile. In other words, if you're in the highest quintile, you're most likely of all quintiles to stay there. If you're in the lowest quintile, you're second-most likely to stay there. And if you're in the top 1%, you're extraordinarily likely to stay in the top quintile. Data on the bottom 1% is not available.

The data is in page 7 of the report linked here, if you're interested.

From Sowell:

At the highest income levels, people are especially likely to be transient at that level. Recent data from the Internal Revenue Service show that more than half the people who were in the top one percent in 1996 were no longer there in 2005.

And again:

Most Americans in the top fifth, the bottom fifth, or any of the fifths in between, do not stay there for a whole decade, much less for life.

And most certainly do not remain permanently in the top one percent or the top one-hundredth of one percent.

Mmmmmmmm....Pie.

At the highest income levels, people are especially likely to be transient at that level. Recent data from the Internal Revenue Service show that more than half the people who were in the top one percent in 1996 were no longer there in 2005.

I imagine that many of them retired, so I don't think this means as much as Sowell believes.

Sowell mischaracterizes the data in the report he cites, as far as I can tell. The numbers I give above are the percentage of folks who stayed in their quintile. Again, in the top quintile, 69% stayed in there.

In addition, yes it's true that only 25% of the folks in the top .01% of income stayed there, but where did they go? Unless I'm reading the data wrong, 85% stayed in the top 1%. That's according to Table 4 (page 11) of the report he cites. Only 6% fell out of the top quintile altogether.

I don't blame you for not getting into the weeds of his data. But unless I'm missing something, it's not that hard, and he's not the most careful guy in the world. He's kind of a big picture guy.

I think Brett is picking nits. Sowell is a big picture guy. He's looking at the data with a longer view than one generally gets with a green lamp-shade. He's talking about decades and not so much year-to-year statistics. And he's not suggesting that those in the top one percent are going to move into the bottom half of the spectrum--but he rightly notes that many do have "off" years. His larger--and still valid point--is that income levels fluctuate over a person's lifetime. In America we do not have permanent classes into which we are born and must forever remain. The chattering of folks like Quindlen that suggests otherwise is unworthy in our country.

Julie: I wasn't nitpicking; I was trying to be kind to Sowell and to your praise of him. His argument is shoddy. You wrote that "few remain in the top for longer than a decade." Based on the numbers in the very report Sowell cites, 69% of the folks in the top quintile were there at the beginning and the end of the decade. And very, very few people fell out of the top quintile - or even the top 5 or 10% - if they were "super-rich."

Myths are fine; Sowell should just look at the data if he's going to try to appropriate its authority.

I admire Sowell, and have some of his books, but the stats don't bear out what is being claimed here.

The US is not medieval Europe, but there is not the degree of mobility some on the right like to believe in either.

In America we do not have permanent classes into which we are born and must forever remain.

That is literally true of course, but few people would claim otherwise.

One of the obstacles the GOP is facing next year is that most Republicans are totally bullish on the economy, while Democrats and independents are more pessimistic. Being out of touch on the economy is not a smart place to be.

We do not have hereditary houses of wealth, nor did we ever. What happens to personal wealth in terms of broad fluctuations from year to year or even over a decade is not really the point. Sowell's point that people can acquire wealth and lose it in America is quite true.


The truly wealthy can afford their taxes, or effectively shelter them, which is why those who are wealthy Democrats do not oppose raising taxes.


Lori Hahn's point is good, but I would suggest that many people just starting out can be very poor; we sure were, my husband and I. Attitudes and expectations can trap people and government paying them to maintain those attitudes and expectations is horrible.

Kate, you are right...when starting out people tend to be poor. When my husband and I were first married we were both college students and I can remember splitting a double cheeseburger value meal for $2.99. But, I never thought that it was the government's responsiblity to take care of us. We put ourselves through college and made our own way.

The presentation at our school explained the mindset of people who have been in poverty for generations. These people are not moving up...they are content to stay in poverty and let the government take care of them. And the government does. I think that most Americans would be shocked to see the assistance that these people are given...from car registration money to yearly allotments to even buy a car. There is no incentive for these people to work their way up when they are given everything they need.

And while there is movement among the classes...I know that we personally moved up, there is also a lot of people in rural America that are content to stay where they are at the bottom. So, my question is, how do we change the mindset of today's youth to break the cycle of generational poverty?

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