u.s. income inequality
a new nytimes story by david cay johnston presents some intriguing data on u.s. income inequality. a few summary points and excerpts from the article:
1. It takes $327,000 per year to make the top 1% in the nation, but income is rising significantly for this (and only this) group.
Only for those Americans in the top 1 percent, the nearly 1.3 million taxpayers who made at least $327,000, did incomes increase significantly more in 2003 than the rate of inflation. And this increase was concentrated within the top tenth of 1 percent. ... For the bottom 99 percent of taxpayers, income rose by slightly less than 2 percent, which was below the inflation rate of 2.3 percent.
2. The top 1% makes more (17.5% of all income) and pays more taxes (33% of all taxes) than other groups.
The top 1 percent of taxpayers received almost 17.5 percent of all income and paid a third of all income taxes in 2003, the I.R.S. found. The top tenth of 1 percent received 7.57 percent of reported income and paid more than 15.3 percent of all income taxes.
3. The top tenth of 1% (.1%) makes more than the bottom 33% and inequality between these groups has risen sharply in the last 25 years.
The top tenth of 1 percent had more income in 2003 than the poorest third of taxpayers, a group with 330 times the number of people, analysis of the data showed. This is a sharp change from 1979, the earliest year in the I.R.S. report, when the total income of the poorest third of Americans exceeded that garnered by the top tenth of 1 percent by 2.5 to 1.
4. The US has less income disparity than Mexico and Russia, but greater disparity than other nations.
Other data show that among major world economies, the United States in recent years has had the third-greatest disparity in incomes between the very top and everyone else. Only Mexico and Russia, among major economies, have greater disparity.
I don't know whether the IRS counts prisoners among the bottom 33%. If not, the change in inequality is presumably even greater. Also, inequalities of wealth are far greater than those of income. The relationship between inequality and crime is contested, but the long-term trend toward greater inequality makes me nervous -- are we really building a "stakeholder" society for the bottom third? does an ideology of meritocracy become less tenable with such disparities?