As a wise man said, if losing a donut makes you unhappy, don’t bet donuts. But I’ll double down for a Boston Cream on this one: Income inequality in the US is increasing.
- Since 1970, incomes for the top 1% have soared. After-tax, before-tax, what-tax.
- The top 1% captures as much of the total US income as they did back in the Roaring 20’s.
- Between 1979 and 2007, the top 10% has captured 63.1% of all growth in income. The top 1%? A measly 38.3%.
See handy dandy charts below. And see references farther below.
The geek in me notes that many things have changed since the Roaring 20’s. Marginal tax rates have fallen from rates in the 80%. Social services are much greater. And life is, well, just different. But in any event, it sure seems that the top 10%, and the top 1%, are farther away than ever.
“Average After-Tax Household Income”, from the Congressional Budget Office, June 2010
“Income Inequality in the United States, 1913 – 1998” in the Quarterly Journal of Economics, 118, 2003 by Thomas Piketty and Emmanuel Saez. Updated 2008.
Share of the total household income growth attributable to various income groups, 1979 – 2007
“Sources of Income for All Households, by Household Income Category, 1979 – 2007” from the Congressional Budget Office Average Federal Taxes by Income Group as complied in The State of Working America, 12th Edition from the Economic Policy Institute
2014: “A Guide to Statistics on Historical Trends in Income Inequality”, Center on Budget and Policy Priorities, by Chad Stone, Danilo Trisi, Arloc Sherman, and William Chen
2013: “Income Inequality: Evidence and Policy Implications” Arrow Lecture, Stanford, by Emmanuel Saez, UC Berkeley
2008: “Income Inequality in the United States, 1913 – 1998” in the Quarterly Journal of Economics, 118, 2003 by Thomas Piketty and Emmanuel Saez. Updated 2008.