The rich get richer. Today's New York Times explains how much richer:
The 400 wealthiest taxpayers accounted for more than 1 percent of all the income in the United States in the year 2000, more than double their share just eight years earlier, according to new data from the Internal Revenue Service. But their tax burden plummeted over the period.
The data, in a report that the I.R.S. released last night, shows that the average income of the 400 wealthiest taxpayers was almost $174 million in 2000. That was nearly quadruple the $46.8 million average in 1992. The minimum income to qualify for the list was $86.8 million in 2000, more than triple the minimum income of $24.4 million of the 400 wealthiest taxpayers in 1992.
While the sharp growth in incomes over that period coincided with the stock market bubble, other factors appear to account for much of the increase. A cut in capital gains tax rates in 1997 to 20 percent from 28 percent encouraged long-term holders of assets, like privately owned businesses, to sell them, and big increases in executive compensation thrust corporate chiefs into the ranks of the nation's aristocracy.
This year's tax cut reduced the capital gains rate further, to 15 percent....
In 2000, the top 400 on average paid 22.3 percent of their income in federal income tax, down from 26.4 percent in 1992 and a peak of 29.9 percent in 1995....
Had President Bush's latest tax cuts been in effect in 2000, the average tax bill for the top 400 would have been about $30.4 million — a savings of $8.3 million, or more than a fifth, according to an analysis of the I.R.S. data by The New York Times. That would have resulted in an average tax rate of 17.5 percent.
I'll note for the record that the period of wealth accumulation under discussion is the Clinton era, not the Bush era. I don't worship Clinton. If the numbers say this became a less egalitarian country on his watch, I'm not shocked.
(Of course, it needs to be remembered that the Clinton era was also the Gingrich era.)
It's interesting to compare the charts at the Times link with the ones Kevin Drum at Calpundit found in a publication of the Boston Federal Reserve, Regional Review. As Kevin explains,
The top chart shows the familiar increase in income inequality: the richest quintile has grown far faster than any of the others. The bottom chart shows the surprise: fewer people are moving up, fewer people are moving down, and more people are staying put.
This is important because, as he notes, conservatives regularly explain away the huge disparities in income in this country by saying that this country has great mobility from class to class. As is made clear from the charts, that's simply not true. (Go to the link -- don't worry, the charts are quite readable)