Top 1% Doubled Share of Nation’s Income, CBO Study Finds

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Wednesday 26 October 2011

The top 1 percent of earners more than doubled their share of the nation’s income over the last three decades, the Congressional Budget Office said Tuesday, in a new report likely to figure prominently in the escalating political fight over how to revive the economy, create jobs and lower the federal debt.

Specifically the report made these points:

--The share of after-tax household income for the top 1 percent of the population more than doubled, climbing to 17 percent in 2007 from nearly 8 percent in 1979.
--The most affluent fifth of the population received 53 percent of after-tax household income in 2007, up from 43 percent in 1979. In other words, the after-tax income of the most affluent fifth exceeded the income of the other four-fifths of the population.
--People in the lowest fifth of the population received about 5 percent of after-tax household income in 2007, down from 7 percent in 1979.
--People in the middle three-fifths of the population saw their shares of after-tax income decline by 2 to 3 percentage points from 1979 to 2007.

The study was requested by Senators Max Baucus, Democrat of Montana and chairman of the Finance Committee, and Charles E. Grassley of Iowa, when he was the senior Republican on the panel.

read more: http://www.truth-out.org/top-earners-doubled-share-nation%E2%80%99s-income-study-finds/1319641385


from the CBO:

After-tax income for the highest-income households grew more than it did for any other group. (After-tax income is income after federal taxes have been deducted and government transfers—which are payments to people through such programs as Social Security and Unemployment Insurance—have been added.)

CBO finds that, between 1979 and 2007, income grew by:

275 percent for the top 1 percent of households,
65 percent for the next 19 percent,
Just under 40 percent for the next 60 percent, and
18 percent for the bottom 20 percent.

The share of income going to higher-income households rose, while the share going to lower-income households fell.

The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.
Most of that growth went to the top 1 percent of the population.
All other groups saw their shares decline by 2 to 3 percentage points.

Market Income Shifted Toward Higher-Income Households

Shifts in the distribution of market income underlie most of the changes in the distribution of after-tax income. (Market income—or income before taxes and transfers—includes labor income, business income, capital income, capital gains, and income from other sources such as pensions.)

Each source of market income was less evenly distributed in 2007 than in 1979.
More concentrated sources of income (such as business income and capital gains) grew faster than less concentrated sources (such as labor income).

Government Transfers and Federal Taxes Became Less Redistributive

Government transfers and federal taxes both help to even out the income distribution. Transfers boost income the most for lower-income households, while taxes claim a larger share of income as people's income rises.

In 2007, federal taxes and transfers reduced the dispersion of income by 20 percent, but that equalizing effect was larger in 1979.

The share of transfer payments to the lowest-income households declined.
The overall average federal tax rate fell.




read: http://www.cbo.gov/doc.cfm?index=12485

Entire Document (pdf): http://www.cbo.gov/ftpdocs/124xx/doc12485/10-25-HouseholdIncome.pdf

Full Summary (pdf): http://www.cbo.gov/ftpdocs/124xx/doc12485/WebSummary.pdf

CBO blog post: http://cboblog.cbo.gov/?p=2909

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1. Recommend

[Initech]

2. Unbelievable. They're profiting handsomely while bleeding us dry.

[malaise]

3. The entire report is a MUST READ

http://cbo.gov/ftpdocs/124xx/doc12485/10-25-HouseholdIncome.pdf

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4. absolutely right, both pdf files

. . . very comprehensive and informative

[malaise]

6. Rachel showing this now n/t

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7. thanks

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5. .

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8. on npr today

[malaise]

9. Was on BBC news as well and on local news

here in Jamaica