Rich-poor gap widens quickly in U.S.
Wealthy earning much faster than middle-, low-income groups
The richest 1 per cent of Americans have been getting far richer over the past three decades, while the middle class and poor have seen their after-tax household income doing nothing more than crawling up by comparison, according to a government study.
After-tax income for the top 1 per cent of U.S. households almost tripled, up 275 per cent, from 1979 to 2007, the nonpartisan Congressional Budget Office found. For people in the middle of the economic scale, after-tax income grew by just 40 per cent. Those at the bottom experienced an 18 per cent increase.
"The distribution of after-tax income in the United States was substantially more unequal in 2007 than in 1979," CBO Director Doug Elmendorf said in a blog post. "The share of income accruing to higher-income households increased, whereas the share accruing to other households declined."
The top 1 per cent made $166,000 or more in 1979; that jumped to $349,000 in 2007, the study said. The income for the top fifth started at $51,607 in 1979 and rose to $71,016 in 2007. On the other end of the spectrum, those in the 20th percentile went from $12,823 in 1979 to $14,851 in 2007.
The report, based on data from the Internal Revenue Service tax collection agency and the Census Bureau, comes as the Occupy Wall Street movement protests corporate bailouts and the gap between the haves and have-nots. Demonstrators call themselves "the 99 per cent."
The report also found:
- The top 20 per cent of the population earned 53 per cent of after-tax income in 2007, as opposed to 43 per cent in 1979.
- The top 1 per cent reaped a 17 per cent share of all income, up from 8 per cent in 1979.
- The bottom 20 per cent reaped just 5 per cent of after-tax income, versus 7 per cent in 1979.