In this second American post-World War II epoch, “pre-tax” incomes for the bottom 20 percent stop rising. They sink — by 25 percent.
Incomes at the top, on the other hand, don’t just increase. They boom. Top 1 percent incomes more than triple after taking inflation into account, the Piketty team calculates, up 204 percent. Top 0.1 percent incomes more than quadruple, up 320 percent. The richest of the rich — the top 0.001 percent — watch their incomes leap a staggering 636 percent!
All these “pre-tax” numbers, once again, show the same economic trajectory that other researchers and earlier work by Piketty and Saez have already noted. But the new Piketty, Saez, and Zucman research adds some unexpected nuance once we turn to the “post-tax” figures, the numbers that reveal the impact of redistributive government transfers and public spending.
In the second postwar epoch, the 1980-to-2014 years, redistributive programs and policies do still somewhat help the poor, but much less significantly. Their positive impact drops by well over half. That 25 percent crash in “pre-tax” income that Americans in the bottom 20 percent experienced between 1980 and 2014 becomes, after tax, a slight 4 percent increase.
In other words, second-epoch government policies and programs enable the poor to do no better than tread water. For the poor, economic uplift ends.
For what Piketty, Saez, and Gutman define as the middle class — the 40 percent of the adult population between the bottom 50 percent and the top 10 percent — we see a different “post-tax” story. Government economic programs help this middle class more in the second epoch than the first. Middle-class adult “post-tax” incomes rise by almost half, 49 percent, between 1980 and 2014.
And now the third epoch beckons. What to expect? The boom — for the rich — will intensify under the GOP tax plan. So will the downward pressure on the incomes of America’s poor as the giant deficits the Republican plan generates become a cynical political rationale for still more cuts in government’s redistributive safety-net programs.
But the most startling epoch-three outcome will be the front-on hit the GOP tax plan visits upon middle-class America. The GOP plan guts a major share of the government policies and programs that, taken together, help Americans gain and keep middle class status.
The Senate-passed tax bill, as Intercept Washington bureau chief Ryan Grim catalogs, raises $1.3 trillion “by going after deductions for state and local taxes, mortgage interest, charitable contributions, interest on student loans, medical expenses, teachers’ out-of-pocket expenses for paper and pencils for students, and a bunch of other nickel-and-diming of the middle class.”
Government policies and programs helped the middle class in epoch two. That help shrinks away in epoch three, just as serious support for the poor shrank significantly in epoch two. In epoch three, the GOP tax plan has government policies and programs concentrating more on keeping income and wealth concentrated — in the pockets of America’s most comfortable — than helping America’s vast non-rich majority.
John Bogle, the outspoken 88-year-old founder of the Vanguard Group mutual fund family, has lived through all of epochs one and two. He may have the most fitting label for epoch three. He’s calling the America the GOP tax plan will create “a moral abomination.”
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December 6th, 2017 
Awake Goy 
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