“This is not the type of thing which a democratic society, a capitalist democratic society, can really accept without addressing.”
— Alan Greenspan, former Federal Reserve chairman
’Tis the season for reckoning. To inaugurate the new year properly, I thought it appropriate to provide Ulster County personal income numbers that relate to the recent debate about economic inequality in American society. So here goes.
In 2011, the latest year for which state income tax returns are available, 278 full-time Ulster County residents reported to the state gross incomes minus specific deductions of a half-million dollars or more. That number, up from 243 the year before, represents about the top one third of one per cent of Ulster County full-time residents who filed state tax returns. In terms of income at the top, this proportion places Ulster County where it is geographically: one foot in a dynamic New York City metropolitan economy and the other in a largely stagnant upstate scene.
Is 278 a lot or a few? That depends what Ulster County is being compared to. One of every 23 Manhattan resident income earners (35,376) made $500,000 in 2011. Buoyed by these big-city numbers, statewide about one tax filer out of every hundred reported $500,000 in personal income. In Ulster County, the proportion was one of every 290 filers. Most of the rest of upstate had an even lower proportion.
The year-to-year increase in top-end incomes seems a reflection of both a general inflation of incomes and the global trend toward increasing inequality of income. The number of persons at middle-income levels has shrunk as the number of people with higher incomes and lower incomes has steadily increased.
There were 4753 full-time Ulster County tax returns, including joint filers, reporting $100,000 in personal income or higher in 2000. The number attaining that level of income increased to 6888 in 2005, 9605 in 2010, and 9975 in 2011 (the most recent data available).
How is the poorer segment of Ulster County earners doing amidst the increasing number of the well-to-do? In the eleven most recent years for which state Taxation and Finance records are available, the number of Ulster County filers indicating no incomes at all or incomes below $5000 has increased at about the same rate as the whole labor force grew during that period. That number was 11,112 in 2000, 11,811 in 2005, 12,376 in 2010, and 12,931 in 2011.
When it comes to incomes, those of persons, or families, earning $200,000 or more (there was no $500,000-plus category in the 2000 state statistics) in Ulster County increased by about 45 per cent between 2000 and 2011. The total gross incomes minus specific deductions of the larger number of filers earning $20,000 or less decreased by about the same proportion during the same period.
Here’s the bottom line: The statistics show that the 1705 Ulster County filers with incomes of
$200,000 or more in 2011 generated more adjusted total income than all 49,126 filers with incomes below $40,000. That’s inequality on a grand scale.
The data shows that inequality of income in Ulster County has been becoming more severe. Eleven years earlier, the same number of top-end filers had earned a smaller piece of the income pie.
Lower middle class shrinkage
These may be good statistics to ponder at a season of year when we resolve to show greater compassion to the weakest, poorest and most unfortunate of our brethren. The data indicates not a proverbial rising tide lifting all economic boats in Ulster County but an increase in numbers at both the top and the bottom parts of the income pyramid at the expense of the middle. That’s the national picture, too.
The lower middle class, as elsewhere, is shrinking. The number of Ulster County filers in the lower middle of the income pyramid, those reporting adjusted personal incomes between $20,000 and $60,000, have decreased from 28,150 in 2000 to 27,350 in 2011, a period during which the number of total returns have increased by 5365.
Another part of the story, to which we’ve alluded above, is geographical. According to the 2011 statistics, more than 70,000 of the 89,547 New York full-time households filing income tax returns of $500,000 or more were full-time residents either of New York City or of the innermost ring of its suburban New York counties, consisting of Westchester and Nassau counties. An additional 3000 high-earning persons were in the outer ’burbs: Suffolk, Rockland, Putnam, Dutchess and Orange counties. That left about 16,500 $500,000-plus tax returns for the rest of the state.
The numbers of half-million-plus full-time resident earners falls off rapidly as one moves further upstate. Added to Ulster County’s 278 are Columbia’s 149, Sullivan’s 76, Greene’s 55, Delaware’s 35 and Schoharie’s 11.