Secrecy News

Growing Income Inequality Examined by CRS

The inequality of income among American taxpayers has grown markedly in recent years, the Congressional Research Service confirmed in a new study of U.S. tax records.

Even as total income grew between 1996 and 2006 (the last year for which individual tax data are available), many Americans were losing ground.

“Inflation-adjusted income actually fell for those in the bottom income quintile (the poorest 20% of tax filers) and almost doubled for the richest 0.1% of tax filers,” the CRS found. “Consequently, income inequality increased between 1996 and 2006.”

The CRS report identified multiple contributors to the growing inequality, including disparate changes in salaries, growth in capital income among high-income taxpayers and modifications of tax policy which exacerbated existing inequalities.

“Earnings inequality has been increasing over the past three decades, and the share of income from capital has increased for high-income tax filers. Furthermore, the 2001 and 2003 Bush tax cuts, while reducing taxes for almost all tax filers, reduced taxes for high-income tax filers to a greater extent than for lower-income tax filers.”

Of these, “Changes in capital gains and dividends were the largest contributor to the increase in the overall income inequality,” the CRS report said. See “Changes in the Distribution of Income Among Tax Filers Between 1996 and 2006: The Role of Labor Income, Capital Income, and Tax Policy,” December 29, 2011.

3 thoughts on “Growing Income Inequality Examined by CRS

  1. Once more around the block..***sigh****
    Yes it is true that the rich get richer, and the poor get poorer. This has not changed much in the last 2000 years or so. The thing that is so incomprehensible to me is that people are “poor” if they THINK they are poor. When one has no money, one is not necessarily “Poor”, one is only financially restricted. It is by spending habits, and desire for the ‘finer’ things in life, and lack of self discipline that truly makes and keeps the ‘poor’ …poor! In this country one may have as many riches as one desires. Look at your bank balance and judge yourself. You will see the sum total of your personal wealth desire reflected there. There is no governmental body responsible for seeing to your personal wealth. You bear the sole responsibility, and you are the judge. You decide. There is only you. There is no one else to bear the blame.

  2. I was going to say you’re brooking the displeasure of the disciples of Rand and Robert Rector types for being the facilitator of unwelcome statistics. However, I see it’s already too late.

  3. To: Art Blundell

    Your STORY has no facts, the author article has facts and stats. I know you have to tell yourself that the reason people are poor is 100% their own fault. Many people have been laid off to no fault of their own, many have had medical problems or have had an accident, and many have people just have had bad luck. Yes there are many people that are poor because they are lazy or bad with finances, but there are many people that are poor for other reasons. One thing you can’t deny is that it’s a lot easier for someone that is born wealthy to stay wealthy because of connection, family support, help through college, working for a family business, or inheritance.

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