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IN THE NEWS

 

Top 1 Percent's Income Grew 275 Percent From 1979 - 2007

"The income of the richest 1 percent in the U.S. soared 275 percent from 1979 to 2007, but the bottom 20 percent grew by just 18 percent, new government data shows.

The Congressional Budget Office (CBO) released a study this week that compared real after-tax household income between 1979 and 2007, which were both after recessions and had similar overall economic activity.

While the income of the richest 1 percent nearly tripled, increases were smaller down the economic ladder. After the 1 percent, income for the next highest 20 percent grew by 65 percent, much faster than it did for the remaining 80 percent of the population but still lagging well behind the top percentile." Source: ABC News

To read the remainder of the ABC story and CBO Study, please click the following website links 

http://abcnews.go.com/Business/income-doubles-top-percent-1979/story?id=14817561

 

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After-Tax Income Grew More for Highest-Income Households

SOURCE: Congressional Budget Office (CBO)

 

CLICK to read entire study http://www.cbo.gov/doc.cfm?index=12485

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.

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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).

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10-27-2011