Fri, Oct 28, 2011 - Page 7 News List

US rich outran middle class: study

AP, Washington

A demonstrator is pictured at the Occupy LA encampment in front of Los Angeles City Hall on Tuesday.

Photo: AFP

The richest 1 percent of Americans have been getting far richer over the past three decades, while the middle class and poor have seen their after-tax household income doing nothing more than crawling up by comparison, according to a government study.

Average after-tax income for the top 1 percent of US households almost quadrupled, up 275 percent, from 1979 to 2007, the Congressional Budget Office (CBO) found. For people in the middle of the economic scale, after-tax income grew by just 40 percent. Those at the bottom experienced an 18 percent increase.

“The distribution of after-tax income in the United States was substantially more unequal in 2007 than in 1979,” CBO Director Doug Elmendorf said in a blog post. “The share of income accruing to higher-income households increased, whereas the share accruing to other households declined.”

The top 1 percent made US$165,000 or more in 1979; that jumped to US$347,000 in 2007, the study said. The income for the top fifth started at US$51,289 in 1979 and rose to US$70,578 in 2007. On the other end of the spectrum, those in the 20th percentile went from US$12,823 in 1979 to US$14,851 in 2007.

The report, based on data from the Internal Revenue Service tax collection agency and the Census Bureau, comes as the Occupy Wall Street movement protests corporate bailouts and the gap between the haves and have-nots. Demonstrators call themselves “the 99 percent.”

The report also found:

‧ The top 1 percent reaped a 17 percent share of all income, up from 8 percent in 1979.

‧ The bottom 20 percent reaped just 5 percent of after-tax income, versus 7 percent in 1979.

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