Thursday, February 18, 2010

Income Inequality, an Introduction

From 1979 to 2005, the poorest 24 million American households have only experienced nine years of positive real income growth. Most of that growth was short-lived, and in 2005 their real average income is only 1.3% higher than it was in 1979, now at $15,900. 

Conversely, during that same time period the richest 0.01% of American households experienced 23 uninterrupted years of real income growth when compared to 1979. Much of that growth was consecutive, and in 2005 their real average income is 383.7% higher than what it was in 1979, now at $35,473,200. 

The richest 11,000 households combined earn slightly more than the poorest 24,116,000 households combined. 

The richest 400 taxpayers in the country, approximately .00013% of the population, earn 1.59% of the nation's income. In 2007, 289 of the top 400 highest grossers paid an effective federal tax rate that was below the national average of 20.4%. From 1992 to 2007, the top 400's share of the nation's Adjusted Gross Income more than tripled, while their share of the nation's tax receipts didn't quite double. 

An ever increasing share of our nation's income is being stovepiped to the top earners. And while their paychecks have seen tremendous increases, their tax rates over the past several years have actually fallen in lockstep. How this effects the financial health of our nation is to come.

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