Income Gap Is Widening, Data Shows
Key Excerpts from Article on Website of New York Times
Posted: April 4th, 2007
Income inequality grew significantly in 2005, with the top 1 percent of Americans those with incomes that year of more than $348,000 receiving their largest share of national income since 1928. The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression. While total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent. The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent. The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. The top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980. The disparities may be even greater. The [IRS] estimates that it is able to accurately tax 99 percent of wage income but that it captures only about 70 percent of business and investment income, most of which flows to upper-income individuals. For Americans in the middle, the share of income taken by federal taxes has been essentially unchanged across four decades. By comparison, it has fallen by half for those at the very top of the income ladder. [Incomes of] the top tenth of a percent and top one-hundredth of a percent ... soared by about a fifth in one year, largely because of the rising stock market and increased business profits.