Thomas Sowell and Dennis Prager Interview: 2008

This is an interview from January 29th, 2008, between Dennis Prager and Thomas Sowell. I will bring more as I can.

Dennis Prager: The next charge that is made: We have greater income inequality, the gap between the rich and the poor, than ever before in America.

Thomas Sowell: That is the number one big lie of our time. And it’s based on abstract statistical categories rather than flesh and blood human beings. Right after my book went to press some data came out which reinforces what I said even more so. If you follow specific individuals over time you discover, for example, that the bottom 20% of tax payers in 1996 had their income increase by 91% by 2005. Meanwhile, the top 1% of taxpayers had their income decline by 26% over that same time period. Now, it’s true that the top bracket has a higher percentage of the income than the bottom bracket by a greater percentage at the end than the beginning (of that time period).  But they are wholly different people in these brackets.

Prager: There are wholly different people in these brackets, meaning?

Sowell: Over half of the people who were in the bottom 20% in 1995 were not there in 2005.

Prager: Oh I see, I see. That’s right.

Sowell: If you get it into the top one hundredth of one percent of income earners, which presumably are the rich everyone talking about, the turnover is 75%. Three-quarters of the people who were in that bracket in 1996, were no longer in that bracket in 2005.

Prager: So you and I have a chance to enter that bracket Tom?

Sowell: I wouldn’t be surprised if we haven’t at one point or another. (Both chuckle) Its usually people who have a spike in income one year, that puts them in that bracket. You know you sell your house in California, well good heavens you’re way up there that one year. Now, unless you have a second house that sells a second year, that’s a one year wonder.

Prager: So your answer to the Democrats refrain, that the inequality is greater than ever, is that those groups fluctuate; and that in fact since ’96, in any event, the income of the bottom fifth has risen far more and the top one percent has declined?

Sowell: Absolutely!