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Replies to post #53638 on Politics and Money
09/01/12 1:38 PM
With the decline in before-tax income offset in part by the decrease in federal taxes, average after-tax income fell 10 percent in real terms. The decline in after-tax income for the highest-income households reversed a substantial portion of the sharp rise in their income between 1979 and 2007.
Although the detailed data that form the basis of CBO’s estimates in this report are available only through 2009, other data can provide some insight into more-recent changes in the distribution of income. Those data suggest that income for households toward the higher end of the distribution increased more rapidly than income for households elsewhere in the income distribution in 2010.
The share of U.S. households’ total income flowing to the top 1 percent of those households rose to 19.8 percent in 2010. Although lower than the peaks reached in 2000 and 2007, that percentage is still among the highest since the late 1920s (see Figure 1).
The average income of the top 1 percent of households rose by nearly 12 percent from 2009 to 2010, after adjusting for inflation. The average income growth for the richest households at the very top of the income distribution was even stronger (see text box below). The recent income growth at the top follows significant losses in 2008 and 2009.
The average income of the bottom 90 percent of households, in contrast, which fell substantially during the recession in both 2008 and 2009, remained at its lowest level since 1983, in inflation-adjusted dollars.
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