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The income gap between rich and poor in the United States has increased significantly, The New York Times online edition reported last week.
According to the report, new analyses of 2005 tax data shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans.
Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980. The report cites Internal Revenue Service data analyzed by economist Professor Emmanuel Saez of the University of California, Berkeley, and Professor Thomas Piketty of the Paris School of Economics.
If the economy is growing but only a few are enjoying the benefits, it goes to our sense of fairness," the report quoted Professor Saez as saying. "It can have important political consequences," the professor said. While total reported income in the US increased almost 9 per cent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 per cent dipped slightly compared with the year before, dropping 172 dollars, or 0.6 per cent.
According to the report, the gains went largely to the top 1 per cent, whose incomes rose to an average of more than 1.1 million dollars each, an increase of more than 139,000 dollars, or about 14 per cent. The top 10 percent, roughly those earning more than 100,000 dollars, also reached a level of income share not seen since 1928, according to the report.
Last year, according to data from other sources, incomes for average Americans increased for the first time in several years, the report said. But because those at the top relied heavily on the stock market and business profits for their income, both of which were strong last year, it was likely that the disparities in 2005 were the same or larger now, The New York Times quoted Professor Saez as saying.
Saez noted that the analysis was based on preliminary data and that the highest-income Americans were more likely than others to file their returns late, so his data might understate the growth in inequality. According to the report, the Bush administration has argued that its tax policies, despite cuts that benefited those at the top more than others, had not added to the widening gap but "made the tax code more progressive, not less." |
