The income of the top fifth is heading upward like a jet on take-off. The bottom fifth's income is hugging the ground, barely growing. In 1967, the income of the top fifth was 11 times higher than that of the lowest. The gap widened over the next 33 years. In 2000, the top fifth earned nearly 14 times more than the lowest fifth.
Recent Census data indicate that income disparities may have remained flat since 1993. However, researchers have begun to point out that the Census is not an entirely reliable source for trends in income. They do not report capital gains income, for example, which grew from $163 billion in 1993 to $427 billion in 1998. The Census does not record earnings over $999,999; a person making $5 million is classified in the $999,999 and higher bracket.
Data from the IRS seem to offer a more comprehensive look at high-income households. The Center on Budget and Policy Priorities' analysis of IRS data shows that, between 1995 and 1997, the average after-tax income of the 1% of tax filers with the highest income jumped 31% or $121,000. The income of the bottom 90% rose just 3.4%. From 1993-97, the top 1% of tax filers secured after-tax income gains of 41%, while the bottom 90% saw only a 5% percent raise.1
Average After-Tax Income
| Year | Top 1% | Bottom 90% |
| 1993 | 366,150 | 22,757 |
| 1994 | 369,535 | 22,939 |
| 1995 | 396,545 | 23,041 |
| 1996 | 448,704 | 23,168 |
| 1997 | 517,713 | 23,815 |
| Change 93-97 | 41.4% | 4.6% |
The income shown above is adjusted for inflation and expressed in 1997 dollars. Income is "adjusted gross income" minus federal income taxes.
Sources: Shapiro, Isaac, Robert Greenstein and Wendell Primus. "An Analysis of New IRS Income Data." Center on Budget and Policy Priorities. Retrieved November 30, 2001 from the World Wide Web: http://www.cbpp.org; Fones, Arthur F. and Daniel Weinberg, U.S. Census Bureau, Current Population Survey, The Changing Shape of the Nation's Income Distribution.
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about 1 year ago
where is the missing 9% between the top 1% and the bottom 90%? Placing that 9% with the upper 1% could substantially lower the percentage increase of that group or, conversely, if placed in bottom 90% group could substantially raise the percentage increase for that group. For me, the conclusions of this report would be subject to debate unless and until that missing 9% is accounted for. also, it seems logical to me that people who are already rich will find it easier to become richer, not because they are taking income away from the "bottom 90%", but because the wealthy have more options available to them for generating additional income, whether it be active or passive sources of income (starting or investing in businesses, stock market investments, real estate, etc). Those with lower incomes have less disposable income and thus are less likely to set aside "extra" funds for such income-generating opportunities.