Income Disparity and Sources of Income

Posted on November 23, 2011 by Andrew Kurz

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SUMMARY

Regardless of how one views the Occupy Wall Street (OWS) movement and “We are the 99 percent”, it has succeeded in raising awareness about wealth distribution. Also in October, 2011, the Congressional Budget Office (CBO) published an analysis of household incomes addressing that subject.

 CBO first grouped households by quintiles (1/5 in each) and clearly the top fifth have done far better than the bottom fifth. CBO then divided the top 20% (fifth) into 10%, 5%, 4%, and the highest 1% of households. The income disparity was even more striking with the highest 1% far greater than the others. 

This analysis further drills down within this top 1% and finds income disparity wider yet, and vastly greater than all other group comparisons. Pre-tax income for the top 1/100 of 1%, (or 12,000 households) totaled some $450 billion, greater than the combined pre-tax income of the 24 million lowest income households. To rephrase, income of just one of these richest households is more than 2,000 lowest income households. Continue reading →

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Worsening Inequality of Wealth and Incomes

Posted on November 7, 2011 by Andrew Kurz

SUMMARY

In October 2011, the Congressional Budget Office (CBO) released an analysis at the request of the Senate Committee on Finance. The analysis documents changes in household income distribution from 1979 to 2007. That analysis titled “Trends in the Distribution of Household Income” notes that the share of average after-tax income for the top 20% gained, while the lower 80% declined seen in Summary Figure 2.

Further, within the top 20%, the share of after-tax income of the top 1% grew from less than 18% to over 30% of the top 20% income bracket. While actual incomes for all quintiles increased, only the share of total after-tax income of the top 1% increased. The 81-99% remained essentially flat while the lower 80% of all households declined over 28 years.   Continue reading →

Filed under: Analyses, Congressional Budget Office (CBO), Wealth and Income | Tagged: , , | 1 Comment »