Disparity in income distribution in action: New York State

[hedgehog]

The unemployment rate in New York State has been ticking along on a slow rise for years.

In September 2007, the rate was 4.6%

In September 2008, the rate was 5.8%

In September 2009, the rate was 8.9%

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?series_id=LASST36000003&data_tool=XGtable

So, for every person out of work in 2007, there are now two people. On the other hand, 95 out of 100 people were working in 2007, today it is 91 out of 100. In 2007, 95 people paid income taxes, in 2009, 91 people did.

Now, here's where it gets interesting: New York depends largely on a state income tax. If most people made about the same amount of money, most people would pay about the same amount of tax. If there are four fewer people paying taxes, then you would expect to see some belt tightening , but no real problems. Instead, the Governor and Legislature are scrambling to fill a major budget gap. The problem is, there are a lot of extremely wealthy people making a huge amount of money on Wall Street. Wall Street's been in the tank, so they haven't made as much money so tax revenues from the very wealthiest people went down enough to cause this problem.

So few people controlled so much wealth that when they took a hit in income, the entire state suffered.