WHY IS THIS VIDEO FROM 2012 GOING VIRAL & ARE ITS ‘INCOME INEQUALITY’ CLAIMS TRUE?

From The Blaze

Screen grab

Ordinarily, when an online video goes viral, it’s because it involves:

1. Cats.
2. People hurting themselves.
3. Cats hurting people.

Videos that don’t go viral are usually longer than five minutes and focus on topics such as, say, wealth distribution.

Well, that’s normally the case except for the fact that the following six-and-a-half-minute-long video entitled “Wealth Inequality in America” (yeah, guess which side of the “inequality” debate the video falls on) has jumped by millions of views (2,993,344 at last count) in the past couple of weeks:

Okay, before we get into the curious case of this video’s sudden popularity, let’s discuss its subject material.

First, the entire video is based on a study done by Mike Norton and Dan Ariely who argue that a “more equitable” society can be achieved if Americans understand the true state of “wealth disparity.”

“Americans don’t understand the extent of disparity in the US, and that they (we) desire a more equitable society,” Ariely writes on his blog.

“It is also interesting,” he adds, referring to his research, “to note that the differences between people who make more money and less money, republicans and democrats, men and women — were relatively small in magnitude, and that in general people who fall into these different categories seem to agree about the ideal wealth distribution under the veil of ignorance.”

“Maybe this suggests that when there are no labels, and we think about the core of our morality in abstract terms (and under the veil of ignorance), we are actually very similar?” he adds.

Of course, while the purpose of the study is to underscore income inequality and cast the so-called “one percent” in what sounds like a negative light, it fails to note other important issues, such as who bears the brunt of the tax burden:

AEI

Also, and this was the problem with the Occupy Wall Street movement, the inequality study doesn’t really address a) how so-called “wealth equality” is to be achieved and b) whether it’s inherently immoral for one man to earn more than another.

Lastly, it’s important to note that income inequality can be explained via demographics, and “because the demographics change, there’s income mobility,” writes Mark J. Perry, professor of economics at the Flint campus of The University of Michigan.

“Most of the discussion on income inequality focuses on the relative differences over time between low-income and high-income American households, but it’s also instructive to analyze the demographic differences among income groups at a given point in time to answer the question: How are high-income households different from low-income households?” he asks.

Here’s a chart that helps illustrate where we’re going with this:

Courtesy AEI

“The good news is that the key demographic factors that explain differences in household income are not fixed over our lifetimes, which means that individuals and households are not destined to remain in a single income quintile forever,” Perry writes.

“Fortunately, evidence shows that individuals and households move up and down the income quintiles over their lifetimes as the key demographic variables highlighted above change,” he adds.

In short, you’re not destined to be poor, you’re not destined to be rich, we’re not locked into these income brackets, and we certainly don’t need a politician stepping in to decide what’s “fair.”

Okay, so … now that we got that out of the way, what the story with this video? How is this textbook “non-viral” material suddenly going, well, viral?

“[I]t’s not whiz-bang production strategies: It’s a series of (nicely done, but not exactly Pixar-splashy) graphics, explained by a very straightforward voiceover,” writes Rob Walker for Yahoo! News. “The message that American wealth distribution is very uneven is something most mildly informed people are aware of; it is also kind of a bummer. That’s not a recipe for viral success.”

Mashable did a write-up on the “Wealth Inequality” video recently, so that probably helped with its sudden surge in popularity. Still, there has got to be more to this story.

The videos’ uploader, politizane, provides a little background.

“Describing himself in an email as a freelance director/designer/visual effects artist based ‘in a red state,’ he’d simply been struck by research from academics Mike Norton and Dan Ariely and wanted to work out a good way of visualizing it,” Walker explains.

“He figured the clip needed to be cut to three minutes to have a hope of catching on, but he couldn’t figure out what to trim — and so just posted it and hoped for the best,” he adds.

But it wasn’t until a few weeks ago that it finally gained traction.

“I actually don’t know who eventually stumbled upon it and posted it to the right place at the right time (either Reddit or Charlie White at Mashable),” politzane said.

Here are some more thoughts from Walker on why the video may have suddenly found a larger audience:

What’s clever about the video is that it uses our familiarity with the subject as a rhetorical weapon. Through a series of graphics we learn what Americans think wealth distribution looks like, based on survey data: really unequal. And then we learn what people say they wish it looked like: still unequal and far from socialism, but less alarming.

[…]

Instead of, “You think X is bad—but viewed from this other angle it’s good,” we get, “You think X is bad—but viewed from this other angle it’s infinitely worse!”

Now whether you agree with anything said in the video, that’s a separate matter. What we find particularly fascinating is its surprise viral status. It seems like its success can be contributed to a combination of presentation, timing, and luck, proving once again that “going viral” isn’t something someone can simply plan for.

Follow Becket Adams (@BecketAdams) on Twitter

Featured image screen grab. This post has been updated to include additional information addressing the “income inequality” argument.

From AEI

The top 1% of US taxpayers pay almost as much in federal income taxes as the entire bottom 95%, and half of that bottom group paid no taxes at all in 2010

Mark J. Perry | December 27, 2012, 11:37 am

According to new IRS data, the 1.35 million taxpayers that represent the highest-earning one percent of the Americans who filed federal income tax returns in 2010 earned 18.9% of the total gross income and paid 37.4% of all federal income taxes paid in that year.  In contrast, the 128.3 million taxpayers in the bottom 95% of all U.S. taxpayers in 2010 earned 66.2% of gross income and that group paid 40.9% of all taxes paid. In other words, the top 1 percent (1.35 million) of American taxpayers paid almost as much federal income tax in 2010 ($354.8 billion) as the entire bottom 95% of American tax filers ($388.4 billion), see chart above. And it’s that group of top income earners (with income above $221,000 in 2010 to be in the top one percent), that Obama and the Democrats want to tax even more.

Further, there were more than 58 million Americans in 2010 who had tax returns with a zero or negative tax liability, so about half of the bottom 95% of American “taxpayers” paid nothing or got a tax refund.

With those data in mind, consider Nolan Finley’s column in the Detroit News comparing paying for milk and paying for taxes, based on an analysis a reader (corporate lawyer Jon Taub) provided:

If every U.S. taxpayer purchased a gallon of milk, each person would pay $2.49, and the total cost would be 140.5 million times $2.49 — or $349 million.

Now let’s assume the government treated milk like government services and determined its price the same way it determines tax rates. The pricing would change as follows:

When the bottom 40 percent of earners buy their milk, they won’t pay a dime for it. In fact, the government would give them $1 in reverse payments for every gallon of milk they purchase. The total cost of providing one gallon of milk to each person in this group would be $196.1 million.

The cost of providing milk to the remaining 60 percent of the taxpayers would be $209.9 million, bringing the total cost burden of all taxpayers’ milk to $406 million.

Under our existing tax rates, instead of paying $2.49 a gallon, the top 1 percent of earners would pay 38 percent of the total milk burden or $109.81 for a gallon of milk.

Nolan concludes:

Taub urges everyone to think about that example whenever they hear President Barack Obama talk about tax fairness, as they will incessantly over the next few weeks.

The current tax system is unfair, but not because the wealthy don’t pay enough.

It’s out of whack because it doesn’t acknowledge that the rich are paying more for their government milk than it’s worth so most others can pay less. And instead of saying thank you, we’re milking those cash cows dry.