posted on July 28, 2004 09:02:37 PM new
Disclaimer- For 12pole and any other numbskull -- Reamond did not write this article; it is posted for discussion purposes only and thus its origins are irrelevant.
I.R.S. Says Americans' Income Shrank for 2 Consecutive Years
he overall income Americans reported to the government shrank for two consecutive years after the Internet stock market bubble burst in 2000, the first time that has effectively happened since the modern tax system was introduced during World War II, newly disclosed information from the Internal Revenue Service shows.
The total adjusted gross income on tax returns fell 5.1 percent, to just over $6 trillion in 2002, the most recent year for which data is available, from $6.35 trillion in 2000. Because of population growth, average incomes declined even more, by 5.7 percent.
Adjusted for inflation, the income of all Americans fell 9.2 percent from 2000 to 2002, according to the new I.R.S. data.
While the recession that hit the economy in 2001 in the wake of the market plunge was considered relatively mild, the new information shows that its effect on Americans' incomes, particularly those at the upper end of the spectrum, was much more severe. Earlier government economic statistics provided general evidence that incomes suffered in the first years of the decade, but the full impact of the blow and what groups it fell hardest on were not known until the I.R.S. made available on its Web site the detailed information from tax returns.
The unprecedented back-to-back declines in reported incomes was caused primarily by the combination of the big fall in the stock market and the erosion of jobs and wages in well-paying industries in the early years of the decade.
In the past, overall personal income rose from one year to the next with relentless monotony, the growth rate changing in response to fluctuations in economic activity but almost never falling.
But now, with many more ordinary employees joining high-level executives in having part of their compensation dependent on stock options and bonus plans, a volatile and relatively unpredictable new element has been introduced to the incomes of millions of workers.
"Risks used to be confined largely to executives and business owners with large incomes,'' said Edward N. Wolff, an economist at New York University who studies wealth and income.
"But now for many people with more modest incomes their earnings are more volatile,'' Mr. Wolff added, leaving them more vulnerable to losing pay they count on to meet regular expenses like mortgage payments, car loans and day-to-day living costs.
The new data also helps explain why personal income taxes, the government's most important source of revenue, are subject to much greater fluctuations than in the past. It may help analysts do a better job in predicting changes in government receipts and provide businesses with clues to help anticipate bigger ups-and-downs in spending for their goods and services.
Before the recent drop, the last time reported incomes fell for even one year was in 1953. The only other time since World War II that the I.R.S. reported an interruption in income gains was from 1947 to 1949, but that was because of changes in the tax law at the time that affected how income was reported rather than an actual fall.
From 2000 to 2002, individual income taxes fell 18.8 percent, more than three times the decline in adjusted gross incomes, the I.R.S.'s latest statistical reports show. (Adjusted gross income is the broadest category of income taxpayers report to the government, excluding only a small portion of income in other forms, notably interest on tax-free bonds.)
To some extent, taxes fell more than incomes because of tax cuts championed by President Bush and approved by Congress in 2001. But in that year and in 2002 the cuts applied primarily to those making less than $100,000, especially families with children, and to capital gains from the sales of appreciated assets like stock.
The major tax rate reductions for highly paid Americans did not take effect until 2003, when - it is clear from spending patterns, general income data and the performance of the stock market - more affluent taxpayers regained some of the losses they experienced in the earlier years of the decade.
Falling incomes, rather than tax cuts, appear to count for the greatest share of the decline in income taxes paid. That is because the higher one stood on the income ladder the greater the impact was likely to be from the stock market crunch.
At the same time many of those whose incomes fell the most - those reporting $200,000 to $10 million in income - paid at the highest rates, which meant that the drain on revenues was even greater when their incomes shrank.
More than 352,000 taxpayers, one of every eight who had worked their way above $200,000 of income in 2000, fell below that figure in 2002.
At the very top the ranks thinned by more than half. The number of taxpayers reporting adjusted gross income of $10 million or more fell to 5,280 from 11,215.
The combined income of this rich and thin slice of Americans plummeted 63 percent, to $110 billion, in 2002 from $300 billion in 2000. Among those who stayed in this category average annual income fell 22 percent, to $20.9 million from almost $26.8 million in 2000.
Capital gains income, which results from selling stock market shares and other assets at a profit, fell over the two years by more than 29 percent, to $246.8 billion from $349.5 billion. So many companies reduced or halted dividends after 2000 that by 2002 dividend income had fallen 17.4 percent, to $98.8 billion.
The stock market decline also affected the incomes of those between $1 and $5,000, which includes large numbers of children in affluent families with investments for college costs. Incomes for that group fell 7.8 percent over the two years, to $33.3 billion, as dividends fell and those who had to sell equities in the depressed market to pay tuition reaped smaller gains in 2002.
Two factors appear to be at work in the decline in capital gains income, which is highly concentrated among the wealthy.
The primary factor was the Wall Street debacle, especially the collapse of many dot-coms and telecommunications companies, which eliminated trillions of dollars of paper wealth.
The second was the creation of a large reservoir of losing stocks, which can be sold to offset gains on winning stocks, reducing the amount of capital gains subject to tax for perhaps years to come.
While detailed analysis of how much losing stocks were used to offset income from winning stocks is not yet available from the I.R.S., the agency did report the number of taxpayers who said they had an overall loss in the value of assets they sold. Net capital losses more than doubled, to $29.9 billion from $13.6 billion, and the number of taxpayers with net losses grew 96 percent, to 13.3 million.
During the same two years the number of Americans reporting no income or that they actually lost money for tax purposes exploded, growing 48.5 percent, to 1.7 million in 2002.
These "negative incomes'' come primarily from two groups: people closing out a failed business and full-time real estate investors, who are allowed to use paper losses like depreciation to offset their wage income.
The huge increase in the number of people with reported losses is an indication of how many people were wiped out as the widening waves of losses from the dot-com era swamped many vendors, from small businesses to landlords.
Those who reported negative incomes in 2002 reported being $65.6 billion in the hole for that year, 12 percent worse than in 2000.
Pearl Meyer, a leading executive pay consultant in New York, said the stock market even took a toll on the pay to the chief executives of the 200 largest publicly traded companies.
"You can see the effect of the stock market's decline in pay actually taken home each year,'' she said.
For the 200 executives, stock option profits, which are taxed at the same rate as salaries, fell to an average of $3 million in 2002 from $5.3 million in 2001 and $7.4 million in 2000, Ms. Meyer said.
Total pay for the top 200 chief executives, she calculated from reports to shareholders, plummeted to an average of $7.9 million in 2002 from $12.5 million in 2000.
The collapse of the stock market boom, however, also affected many people well below that level. John A. Caldwell, chief investment strategist for the McDonald Financial Group in Cleveland, said that when "you have a flat stock market over a two- or three-year time period people are less likely to exercise their options.''
That is because most people, even if they have a meager gain on their options, delay exercising them in the hope that stock prices will rise before their options expire.
posted on July 28, 2004 09:11:27 PM new
Disclaimer- For 12pole and any other numbskulls -- Reamond did not write this article; it is posted for discussion purposes only and thus its origins are irrelevant.
CEOs' raises averaged 15% in U.S. last year
NEW YORK The median pay for a chief executive officer in the United States rose 15 percent in 2003 and was up 22 percent among top executives at larger companies, according to a survey released Wednesday. The survey, by the Corporate Library, a research firm in Portland, Maine, showed increases in almost every category of executive compensation, including base salary, annual bonus, total annual compensation, restricted stock, long-term incentive payouts and the value realized from the exercise of stock options.
.
The only category to decline from 2002 to 2003 was the value of stock option grants.
.
Despite some calls for restraint in pay, it was a better year for the executives than 2002, when the median total compensation rose 9.5 percent.
.
"With statistics such as these, it would appear that any chance of reining in executive compensation has disappeared," the report said.
.
Total compensation for chief executives of four companies - Oracle, Apple Computer, Yahoo and Colgate-Palmolive - rose more than 1,000 percent in 2003, largely through exercising stock options and receiving restricted stock.
.
In comparing 2002 and 2003 compensation, the survey studied more than 1,400 chief executives who occupied their posts in both years. Excluded were those who received no pay one year and normal pay the next.
.
Among the 372 companies in the survey that are listed on the Standard Poor's 500-stock index, median compensation for chief executives rose 22.2 percent.
.
Of the 1,059 remaining chief executives, the median increase was 13.1 percent. Taken together, the increase was 15 percent.
.
Despite public opposition to excessive pay levels, the report said, "since every other element of pay has increased, both in magnitude and frequency, CEOs are unlikely to feel the squeeze for at least three years, perhaps never."
.
The survey also examined the pay of 1,794 chief executives who held their posts for all of 2003 and found that median compensation was $1.85 million.
.
Barry Diller, chief executive of InterActiveCorp, had the highest total compensation, according to the survey. He received $156 million, including stock-option profits of $151 million.
.
Industry by industry, The Corporate Library reported that CEOs of telecommunications and securities and commodities companies had some of the highest median total compensation levels in 2003, coming in at around $8 million in both categories. NEW YORK The median pay for a chief executive officer in the United States rose 15 percent in 2003 and was up 22 percent among top executives at larger companies, according to a survey released Wednesday. The survey, by the Corporate Library, a research firm in Portland, Maine, showed increases in almost every category of executive compensation, including base salary, annual bonus, total annual compensation, restricted stock, long-term incentive payouts and the value realized from the exercise of stock options.
posted on July 28, 2004 09:11:40 PM new
Why is reamond afraid to cite his sources? Probably because he picks them up at left wing wacko commie websites.
posted on July 28, 2004 09:25:32 PM new
Articles are irrelevant without giving credit to the authors or at least where you got the article...
Must piss you off reamond you can't take others work as your own now... awwww lets all have pity party for poor reamond... and his no longer stealing ways... what a POS you are.
AIN'T LIFE GRAND...
Homosexuality is a choice that can be corrected...
posted on July 29, 2004 06:51:37 AM new
Why not post a link?
Articles are irrelevant without giving credit to the authors or at least where you got the article
Why can't you do a google search and look up the information yourslef. It is very simple to do. If you don't know how to do one maybe you can take lessons from Linda since she is a pro.
http://www.iht.com/articles/531537.html
Let's have a BBQ, Texas style, ROAST BUSH
------------------------------
All Things Just Keep Getting Better
------------------------------
We the people, in order to form a more perfect Union....
.....one Nation indivisible, With Liberty and Justice for ALL.
