Wednesday, October 14, 2009

Nobel Prize Inequality

Thirteen 2009 Nobel prizes were recently announced, bringing the total number of Nobel prizes awarded since 1901 to 974, and the recipients of those awards represent 63 different countries.
The chart above shows that almost 96% of all Nobel prizes (934 out of 974) have been awarded to recipients in the 31 countries that have received the most Nobel prizes over the last 109 years, i.e. the top 50% (
data here). The share of Nobel prizes given to the top 5%, 10%, and 25% are also displayed above, and reflect a very unequal distribution of awards.

The unequal distribution of the Nobel prizes among the 63 countries represented by recipients is much greater than the inequality of income among American taxpayers in the United States in 2006 (most recent year available), based on the shares of total income earned by the top 5%, 10%, 25%, and 50% (see chart above,
IRS data here).

So what? Read the rest here at
The Enterprise Blog.

24 Comments:

At 10/14/2009 12:11 PM, Blogger Colin said...

There was particular inequality this year, with Americans taking every prize except literature and co-sharing with Israel on chemistry.

 
At 10/14/2009 12:12 PM, Anonymous Anonymous said...

Top 10% have 50% of the income.

Wow.

Tax policy changes since the 80's sure have a distributive effect on income inequality.

 
At 10/14/2009 12:44 PM, Anonymous morganovich said...

well, they don't call it "the developed world" for nothing.

also: anon - the top 10% of US taxpayers pay 71% of all income tax. (with the top 1% paying 40% of overall taxes). the bottom 50% of taxpayers pay no income tax at all. taxes are far less fairly allocated than income.

 
At 10/14/2009 1:14 PM, Blogger bob wright said...

morganovich

Can you give us a link to the source for your data?

Thanks.

 
At 10/14/2009 1:19 PM, Anonymous morganovich said...

sure.

http://www.ntu.org/main/page.php?PageID=6

is a summary of IRS data.

 
At 10/14/2009 1:47 PM, Anonymous Anonymous said...

Molrganovich,

If you !) highlight the link and 2)then right click copy 3) you paste it between 4)put in some relevant words here that you type (which is your option) and then 5)



Eg; Here is a summary of IRS data.

 
At 10/14/2009 2:06 PM, Anonymous m said...

anon-

thanks for the help on creating links. not sure i understood those instructions.

can you walk me through that again?

 
At 10/14/2009 2:35 PM, Blogger bob wright said...

m:

Copy the HTML text line (instruction) in the following example to your blog comment:

hyper link example and instructions


1) replace

resumepage.html

with the web address you want to link to.

i.e. Put the web address inside the quotes.

2) replace

my resume

with the words you want to name the hyper link.

i.e. the words that appear in blue and underlined.

 
At 10/14/2009 3:03 PM, Anonymous Anonymous said...

This tax data is based on adjusted gross income, which excludes 401k, deferred comp, and includes deductions for interest expense on housing, etc.

If you go by gross income rather than AGI the statistic are not as dramatic.

If you go by wealth, rather than income, the statistics look even more different.

It depends on what point you are trying to prove.

 
At 10/14/2009 3:06 PM, Anonymous Anonymous said...

Australia shared in the medicine one... Note that many labelled as American within the US are dual citizens... and the other country takes credit too.

Perhaps a 50% credit for each country in that case? It may change the statistics significantly

 
At 10/14/2009 3:24 PM, Blogger bob wright said...

anon 3:03 says

"If you go by gross income rather than AGI the statistic are not as dramatic."

Do you have data? A source?

 
At 10/14/2009 4:02 PM, Blogger ExtremeHobo said...

this is a good reference on hyperlinks

http://en.wikipedia.org/wiki/Hyperlink

 
At 10/14/2009 4:31 PM, Anonymous Anonymous said...

Bob,

You can get a picture of the exclusions from income by gross income by looking at IRS data at
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html#_grp3

First go to All Returns, and look at 2007

Then go to Individual Income Tax Returns with Itemized Deductions: Sources of Income, Adjustments, Itemized Deductions by Type, Exemptions, and Tax Items

The latter gives you a sense of the size of exclusions and deductions, such as non taxed interest, and the size of deductions.

You know, if people are not careful they are easily mislead. One of my pet peeves is the AGI misleading and how rich pay most of the the taxes. Go to these charts and you see that people with AGI between 100k-200k pay 20% of the taxes. You can kill misinformation by giving people the sources and tools to figure it out. Good luck and you'll be surprised.

 
At 10/14/2009 4:53 PM, Anonymous Enthic said...

The US now has more Nobel Prizes in Medicine or Physiology than the next 15 nations combined.

 
At 10/14/2009 8:41 PM, Blogger BMWright said...

Cute and creative but to use such a comparison to support the notion that 30 years of rising wealth inequality is good for America is beyond a stretch. In fact it's nonsense. But so are some Economic Nobel Prizes too.

I'm certainly againest tax rates above 30% and death taxes and other socialized wealth redistribution methods but I see no need to make such a silly comparision to such a relevent trend.

Better to say we should do away with American Capitalism, because China's Central Planning Communist Government has done a far better job of directing the economy and creating jobs and wealth for its people in the last 30 years than American supply side economics have done for average American's.

 
At 10/15/2009 4:20 AM, Blogger bob wright said...

anon 4:31 PM,

According to the chart you site, returns with an AGI over $200k pay 54.6% of all taxes paid.

54.6% constitutes most.

Sure, the 100k-200k pay a bunch, 20% certainly constitutes a bunch, but they don't pay the most.

And returns with AGI of $100k + pay 75% of all the taxes.

This is all summarized here.

I guess it comes down to your definition of rich.

The top 10% have AGI of $113,018.

Does being in the top 10% make you rich?

 
At 10/15/2009 8:14 AM, Anonymous Anonymous said...

Yeah, Bob, but don't forget it is AGI. Which means that interest earned on municipal bonds is not included in income; which means deferred comp is not included in income; which means that the seminar vacation I took last year to attend a conference is a deduction; that the fine lunch I had with a client and their wife was a deduction; etc.

I am a high wealth individual that came from a lower middle class background. I am appalled at the whining by people who make a great deal, like myself, who believe that as a percentage of disposable or discretionary income that people making less than $200k are the freeloaders. Uh, Uh. The sweet spot of the tax system is that group; we have been shifting taxes from the very wealthy to that group over time.

Bob, you will also notice that since 1999 the IRS has not reported statistics on such things as taxes based on employment income. For a good reason. The Bush record would have been at risk. I hope the IRS comes out with and resumes its statistical reporting so people have a better understanding of tax fairness and tax incidence.

 
At 10/15/2009 9:14 AM, Anonymous Anonymous said...

If you watnt to do your own research on tax incidence, go to the IRS statistics website. You can see for yourself that what is excluded from AGI by income category, and the amount of taxes paid by category.
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

 
At 10/15/2009 9:29 AM, Blogger bob wright said...

Anon,

You make the case for a flat tax.

All of this "They pay too much", "We pay too little", "Those deductions are just loopholes" finger pointing is subjective.

Your opinion of what constitutes "enough" tax or sweet spots or fairness is arbitrary.

A flat tax where all filers pay the same rate, say 15%, is the only way to be truly fair.

Your federal return on a post card.

Everybody pays the same and everybody pays.

 
At 10/15/2009 9:50 AM, Anonymous morganovich said...

anon-

your argument doesn't make a great deal of sense. it doesn't matter if we discuss AGI or GI. what matters is what percentage of tax collected comes from the top 1% or 10% or whatever.

we know the amount of tax dollars collected and from how many people. what the income was is not really relevant in terms of laying out who is paying for the US government.

you can make a case that the percentages of income tax are not as bad as they look due to deductions, but that has little relevance to who is doing the paying, it's just a measure of burden.

with 50% of Americans essentially paying no net income tax, is it any surprise that we are seeing more and more big government spending supported? why not vote for benefits you get that you know you will never pay for.

worth considering is this:
the top 1% of taxpayers pay 40% of taxes. wealth has never been more mobile than it is now. squeeze this group too hard, and they will leave. if 10% of them leave/stop being economically active, that's a 4% structural deficit.

the US needs to find ways to attract and retain the wealthy, ambitious, and successful. we've done a great job of it for a long time. the best and brightest came here because it was the best place in the world to get rich.

we are in real danger of losing that. we are certainly no longer the best place to BE rich. being rich in the EU will result in much lower taxes for you if you have the sense to keep your investments offshore. the US is a massive tax haven for wealthy Europeans, but our own citizens are taxed on global income.

like it or no, we're going to have to face up to the fact that people and wealth are going to be much more mobile and nations will compete for them just as firms compete for top talent. wishing it weren't so will not make the headhunters stop calling.

i've been looking into this a bit, and you'd be astounded at the number of great deals you can get on citizenship (and tax treatment) if you are willing to make direct investments in local businesses.

 
At 10/15/2009 9:55 AM, Anonymous morganovich said...

also: deductions favor lower income earners more than those with high income (on a % basis).

a family earning $50k/yr gets a lot more bang out of a mortgage deduction than one earning $1 million. the deduction is capped.

deductible car and home office expenses are a bigger part of income, as are travel and entertainment. it's hard to do enough business dinners to offset a million dollars in any meaningful way.

 
At 10/15/2009 3:07 PM, Anonymous Anonymous said...

For some inexplicable reason the links to the direct IRS data do not appear as well as a later post linking to IRS data, but I'll try again.

Here is the link:
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

Persons with AGI below $200k pay 45.4% of taxes; persons with AGI above $1 million pay 27% of taxes.
Persons who have AGI below $25k, I agree, have smaller income tax burdens althought they pay FICA and sales taxes also. I do not know what the current poverty level is.

Again, these are AGI numbers which exclude deferred comp, 401k, and deductions.

 
At 10/15/2009 3:53 PM, Anonymous Anonymous said...

Morgan,

Your statistics are wrong about low income filers.

From IRS data, the 2.4% of filers below $25K pay 1.3% of taxes; if you move up to $30k and below, these 3.9% of filers pay 2.3% of individual taxes.

Given FICA and sales taxes I don't think it is appropriate to tax people living in poverty or at federal poverty levels. They can barely educate their children.

 
At 10/16/2009 11:48 PM, Anonymous Puritan said...

Considering the poor already spend too much money on drugs, alcohol, cigarettes, junk food, cell phones, starter jackets, hip hop CDs, NASCAR, hoodies and basketball shoes, taxing them at 15% would do them some good.

When my alcoholic father was tossed to the curb and had to spend 100% of his income on housing and minimal food, his cigarette and alcohol consumption dropped to zero.

Don't tell me the poor have no excess income! Handouts, and transfers (both cash and in-kind) just give them available resources for wasteful and damaging spending.

 

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