CBO: Top 1% Almost Tripled Incomes, Fueling Wealth Inequality

Wednesday, 26 Oct 2011 08:31 AM

 

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Incomes for the wealthiest 1 percent of Americans nearly tripled from 1979 to 2007, far outpacing income growth for all other groups, said a new report that underscored sharply increased U.S. income disparity.

As demonstrators nationwide protest the power of Wall Street and the wealthy, the Congressional Budget Office gave further evidence that, in the last three decades, the United States has become a far more unequal nation.

"For the 1 percent of the population with the highest income, average real after-tax household income grew by 275 percent between 1979 and 2007," said the report from the CBO, a nonpartisan budget and tax analysis arm of Congress.
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The next-highest 19 percent of earners saw their income grow by 65 percent over the same period. Income grew by just under 40 percent for the 60 percent of the population in the middle, while the 20 percent at the bottom of the scale saw income growth of only about 18 percent, the report said.
The CBO's conclusions will likely figure in the debate over whether tax increases on the rich should play a role in cutting budget deficits and reducing the U.S. national debt.

"This report confirms what the American people already know," said Representative Sander Levin.

"The rules have been changed by the unfair tax policies of the last decade and our tax code is doing less to level the playing field than it was in the past."
Levin is the top Democrat on the U.S. House of Representatives' tax-writing Ways and Means Committee.

As a result of this uneven shift, income was substantially more skewed toward the very top of the income scale in 2007 than it was in 1979, CBO said.

So much so, it said, that in 2005-2007, just before the financial crisis, the top 20 percent of the population received more after-tax income than the entire bottom 80 percent.

CBO said it measured the period between 1979 and 2007 because those years both immediately preceded recessions, making for similar endpoints in the study.

© 2014 Thomson/Reuters. All rights reserved.

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