Paul L. Caron

Wednesday, October 26, 2011

CBO: Trends in the Distribution of Household Income, 1979-2007

Congressional Budget Office, Trends in the Distribution of Household Income Between 1979 and 2007 (Oct. 2011):

After-tax income for the highest-income households grew more than it did for any other group. (After-tax income is income after federal taxes have been deducted and government transfers—which are payments to people through such programs as Social Security and Unemployment Insurance—have been added.) CBO finds that, between 1979 and 2007, income grew by:

  • 275% for the top 1% of households
  • 65% for the next 19%
  • 40% for the next 60%
  • 18% for the bottom 20%
Chart 1

Gov't Reports, Tax | Permalink

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The original CBO data showed what happened between 1979 and 2007. The "concise rebuttal" posted years of 2007-2009. Apples and oranges? You betcha! Cherry picking? Count on it! What you are likely to "see" depends upon the frame with which you are presented.

Posted by: Labored | Nov 1, 2011 11:15:54 AM

According to the CBO blog post accompanying the report - - the Chairman of the Senate committee on finance commissioned the report.

He is a moderate democrat, so I doubt he did it for partisan reasons, but you never know.

Posted by: michael Tyson | Oct 26, 2011 6:11:07 PM

Concise rebuttal at

Posted by: AMTbuff | Oct 26, 2011 3:30:31 PM

Why do you suppose that CBO chose those particular years?

Posted by: ColoComment | Oct 26, 2011 12:17:25 PM

The numbers would be considerably different if the trend went through to 2011 and also included the effect of closely held companies changing forms to pass through entities following the 1986 Tax reform act. The lack of consideration of either makes the statistics misleading.

Posted by: Michael Tyson | Oct 26, 2011 10:07:06 AM