Households in the top 1% of wage earners saw their after-tax incomes more than double between 1979 and 2007, significantly outpacing each of the other income brackets’ growth in wages in those years, according to a report from the Congressional Budget Office released Tuesday.
In total, after-tax incomes for the top 1% shot up by 275% from 1979 to 2007, the CBO found. Those in the next higher bracket – the highest 20% of earners (excluding the top 1%) – saw their earnings increase by 65%, which is not insignificant but only a small fraction of the gains had at the tippy top.
Meanwhile, wages have been comparatively stagnant at the low end of the income spectrum. The bottom 20% saw their wages increase by just 18% during that 28-year period.
As a result, the CBO found that those in the bottom 80% of wage earners saw their share of the nation’s total income decline by 2 to 3 percentage points depending on which bracket they were in, while the top 20% of income earners saw their share increase by 10 percentage points, largely driven by gains among the top 1%.
(Hat tip to the Wall Street Journal)
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