Growing income inequality was the topic of the week as the CBO released a new report showing the incomes of the wealthiest 1% have tripled since 1979, with little to show for everyone else.
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.
The CBPP explained
that the federal tax system is becoming less effective at mitigating income inequality noting that the share of federal revenue coming from payroll taxes has grown, while payroll taxes have become more regressive.
that rising inequality isn’t just about education, as income growth at the top is outpacing, by a wide margin, growth for both those with a college degree and those with less education.