Even in a Down Year, Top 1% Had More Total Income than Bottom 50%

March 6, 2012 at 3:05 pm

The total adjusted gross income (AGI) of the top 1 percent of households in 2009 was 25 percent greater than the total AGI of the bottom 50 percent of households, new IRS data show (see graph).  That’s particularly striking given that 2009 was a “down” year for high-income people.

Even in a Down Year, Top 1 Percent Have More Total Income than Bottom 50 Percent CombinedThe long-term trend in the United States has been towards much greater income concentration at the top.  But the trend isn’t perfectly smooth:  high-income people tend to benefit more from economic expansions than other income groups but tend to get hit harder by recessions.  The swings are particularly pronounced in financial booms and busts.

As my colleague Chad Stone noted yesterday, the incomes of the top 1 percent fell disproportionately during the recent financial crisis but bounced back smartly in 2010.

At the height of the previous expansion, in 2007, the top 1 percent had 87 percent more total AGI than the bottom 50 percent.  But even the 2009 gap of “only” 25 percent — the difference between the $1.32 trillion earned by the top 1 percent and the $1.06 trillion earned by the bottom 50 percent — is pretty staggering.

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More About Chuck Marr

Chuck Marr

Chuck Marr is the Director of Federal Tax Policy at the Center on Budget and Policy Priorities.

Full bio | Blog Archive | Research archive at CBPP.org

3 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. 1

    The highest earners also, benefit from not having to pay Socialo Security tax on their massive incomes since the tax is limited to earning below, approx. $125,000 ; also Long Term gains are NOT SUBJECT to either S.S. Medicare or other taxes such as California SDI.

    The Sales Taxes imposed ,in many States, such as our Calif. tax of 7.25+ hurt the lowest income level since they spend every dollar on necessities, from baby products to household to dining ( if they could afford ) .

    Essentially, the lowest earners are also those LEAST LIKELY TO VOTE…and have very little knowledge of how their Country’s tax system functions.

  2. 2

    As a former IRS ENROLLED AGENT

  3. Very Serious Sam #
    3

    “high-income people tend to benefit more from economic expansions than other income groups but tend to get hit harder by recessions”

    Yes of course. But one shouldn’t look at the income only. Since even during recessions, the total wealth of the top earners increases significantly. As does the debt of the lower 50%.



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