The Big O will give us the SOTU pep talk tonight. Obama will pound on the theme of income inequality in America. A Wordle of the SOTUS will look like:<\/p>\n

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The President will be using language that misses the mark. The issue at hand is not just Income Equality, it’s Wealth<\/span> AND Income<\/span> Inequality. The problem that Obama faces is that America does not tax wealth, it only taxes income. So until America gets around to a tax on wealth, the Prez is stuck with increasing income taxes (reducing deductions) for high income folks in his attempt at leveling the playing field.<\/p>\n

To be sure, there is plenty of income disparity in the USA. The question is how much, and what has changed over time. I looked at data on all EARNED income over the past 23 years. The info come from the Social Security Administration (AKA Treasury\/IRS). The link<\/strong><\/a> to this data, a few graphs of the results:<\/p>\n

How many people make it to the 1% club every year?<\/strong> I was surprised that the number has not changed all that much over a 1\/4 decade. The number of folks who made the financial limelight has varied by only 400k. It’s worth noting however, that 2012 produced the largest number of ‘fat cats’ ever.<\/p>\n

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What income level did it take to be in the 1% club?<\/strong><\/p>\n

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How many total dollars have the 1% taken in each year?<\/strong> In 2012 the 1% raked in 1.05 Trillion. Four times what they made in 1990.<\/p>\n

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What was the 1%ers total income as a percent of GDP?<\/strong> It’s increased quite a bit over time, and it’s the highest ever today.<\/p>\n

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What is the 1%’s income as compared to total earned income?<\/strong> (A better way to look at this<\/em>). This comparison shows a trend that should be a bit scary to those earning the big bucks. As of 2012 it was 17% of all income. 1% make 17%.<\/strong> That’s pretty far out of whack.<\/p>\n

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The numbers from SSA confirm that a small percentage of workers take home a huge percent of the pie. So what’s Obama going to propose tonight? He can yack about a bunch of things that might make a small difference, but if he really wants to move the needle on inequality, he has to raise taxes on the 1%. The problem that O faces is that he’s already tapped this well. Tax rates on the 1% are now at the highest level in a long time:<\/p>\n

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One of the 1%ers, Tom Perkins, a heavy hitter with Kleiner Perkins Caufield & Byers. (VC – of course) , manged to get an OpEd letter at the WSJ. Tommy likened the rising sentiment against the ‘haves’ to a Nazi atrocity.<\/p>\n

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Kristallnacht was unthinkable in 1930; is its descendent \u201cprogressive\u201d radicalism unthinkable now?<\/strong><\/p>\n<\/blockquote>\n

Looking good Tommy! Not….<\/strong><\/em><\/p>\n

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Mr. Perkins needs to get a grip. If he feels threatened today, he’s going to be crapping in his pants tomorrow. Obama will be gunning for his pocketbook. And tonight, when O does call for higher taxes on the rich, half of the congressmen will stand and applaud.<\/p>\n

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