The rich get richer and the poor get poorer….Oops.
The rich get richer and the poor get richer. And the middle class gets poorer.
This is from data found on the Bureau of Census web site covering annual household income from 1967 to 2001. What it shows is that the households in the 95th percentile (those who have higher income than 95% of the rest) earn at least $150,000 per year. Those in the 10th percentile earn $11,000 or less.
The average increase per year for the 95th percentile group was 1.7%, and for the 10th percentile group it was 1.1%. But for those in the 50th percentile (which includes those in the 10th), the increase was only 0.8% per year. That means those whose income falls between $11,000 and $42,000 actually saw even less.
Average annual income increase for:
10th percentile=1.1%
20th percentile=0.9%
50th percentile=0.8%
80th percentile=1.3%
90th percentile=1.5%
95th percentile=1.7%
Total annual income increase 1967-2001 for:
10th percentile=42.6%
20th percentile=33.4%
50th percentile=31.2%
80th percentile=57.0%
90th percentile=67.6%
95th percentile=76.4%
Another interesting angle on this is that in the years following the Bush 41 tax increase, all groups saw a decrease in income. Remember, this is the increase Bush 41 signed in an attempt to “work with Congress.” It cost him reelection. The middle class felt the effects of that until 1994. It barely affected the top 5%. The middle class was just beginning to see the positive effects of the Reagan tax cuts when this increase hit them again.
All groups declined in 2000 and 2001. And the economy is just beginning to recover from the giant “bubble” that got punctured in 1999-2000. As these numbers grow, it is interesting to look back on how all earners in this country have fared when Government does, as some of the candidates advocate, raise income taxes. And I wonder whether the middle class is paying attention.