CBO Confirms Income Inequality in America "Staggering"

I've been writing about this stuff for almost a decade and now it's all slowly being acknowledged even if it's too late to do anything about it. Yesterday the Congressional Budget Office released a report on income distribution since the Reagan Administration and it show in hard numbers pretty much what many of us have been saying all along: the rich have been getting a LOT richer and they've been doing it on the backs of the poor. (link from Mark via email)

Senate Finance Committee chair Max Baucus from Montana...asked the Congressional Budget Office to dig a little deeper into the data on taxes and income than the CBO had dug in a report released late in 2007.

The CBO's December 2007 study, Historical Effective Tax Rates, 1979 to 2005, had looked at the federal taxes Americans at different income levels have been paying since the year before Ronald Reagan's election. But the report had a hole. Nothing in it indicated how the really rich have fared in the near three decades that the basic principles of Reaganomics — tax rate cuts, deregulation, and privatization — have set the public policy pace.

Senate Finance Committee chair Baucus asked the CBO to fill that hole — by focusing on the richest of the rich. The CBO's new report meets that request, with dramatic results.

Americans in the overall top 1 percent, the 2007 CBO data showed, did quite well in the Reagan era's first quarter-century. Their average incomes, after taking inflation into account, essentially tripled, rising 201 percent.

But these top 1 percent stats, the new CBO data help us understand, hardly tell the full story. The truly stunning income increases over recent decades have gone to the tippy-top of the U.S. income distribution, not the top 1 percent, but the top tenth — and top hundredth — of that top 1 percent.

The higher up you go on the income ladder, in other words, the sweeter the Reagan era.

Between 1979 and 2005, the bottom half of the top 1 percent saw their average incomes only double, after inflation. These incomes increased 105 percent. The next highest four-tenths of the top 1 percent somewhat raised the income bar. Their average incomes, after inflation, rose 161 percent.

That brings us to the top 0.1 percent of Americans. Their incomes, from 1979 to 2005, rose a staggering 294 percent after taking inflation into account. Not bad at all. But the top 0.01 percent did even better. The 11,000 households in this rarified air took home an average $35.5 million in 2005, a 384 percent increase over average top 0.01 percent incomes in 1979.

(emphasis added)

I really don't see how anyone can effectively argue that we're living in anything but a plutocracy with numbers like that.

Comments

[eRobin]

And b/c they've got enough of us to believe that if we work hard enough we'll be in that top .01% and that if we never get there it's b/c we're lazy, we just go along with all of this - not wanting even the barest of social investment to be made. Heaven forbid we all have access to a doctor - including specialists and hospitals.