income distribution in the united states

$0 $50,000 $100,000 $150,000 $200,000 $250,000

Income Distribution in the United States

1914 1924 1934 1944 1954 1964 1974 1984 1994 2004$0

$10,000

$20,000

$30,000

$40,000

$50,000

Post-World

War II

boom

1929Stock market crash

Great

Depressio

n

Kore

anW

ar

V i et n

a m W

a r

WorldWar II

I r a q Wa r

1973-74Arab oil embargo 1979

Iranian oil embargo

1987 Stock market crash

Dot co

m stock

boom

bust

Gulf

War

WorldWar I

Woodrow Wilson

WardenHarding

Calvin Coolidge

HerbertHoover

FranklinRoosevelt

HarryTruman

DwightEisenhower

JohnKennedy

LyndonJohnson

Richard Nixon

Gerald Ford

Jimmy Carter

Ronald Reagan

George W. Bush

George Bush

Bill Clinton

&

Includes Capital gainsDoes not include Capital gains

1 9 1 3 – 2 0 0 4 U n i t e d S t a t e s

Av e r a g e I n c o m e

Income per Tax Unit2004 US$

Average Income Prof. Emmanuel Saez’s Web site, University of California, Berkeley, http://elsa.berkeley.edu/~saez/TabFig2004prel.xls (accessed August 25, 2006)

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Woodrow Wilson

WardenHarding

Calvin Coolidge

HerbertHoover

FranklinRoosevelt

HarryTruman

DwightEisenhower

JohnKennedy

LyndonJohnson

Richard Nixon

Gerald Ford

Jimmy Carter

Ronald Reagan

George W. Bush

George Bush

Bill Clinton

Recessions are represented by the gray bars. Each bar starts at the peak of a business cycle and ends at the trough

1 9 4 7 – 2 0 0 4 U n i t e d S t a t e s

Fa m i l y I n c o m e b y N u m b e r o f E a r n e r s



KoreanWar Vietnam WarWorld

War II Iraq War

Gulf

War

$71,246

$37,618

$22,349

$85,178

$100,000

1914 1924 1934 1944 1954 1964 1974 1984 1994 2004$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

2 Earners

3 Earners

1 Earner

No Earners

4 Earners

( M e d i a n 2 0 0 4 d o l l a r s )

$0 $50,000 $100,000 $150,000 $200,000 $250,000

2 0 0 5 U n i t e d S t a t e s

I n c o m e D i s t r i b u t i o n ( B o t t o m 9 8 % )



E a c h e q u a l s 5 0 0 , 0 0 0 h o u s e h o l d s

1 1 2 , 3 6 3 , 0 0 0 h o u s e h o l d s b e l o w $ 2 5 0 , 0 0 0

Average (Mean)$63,344

Median$46,326

20% less than$19,178




95% less than$166,000

98% less than$250,000

To t a l 1 1 4 , 3 8 4 , 0 0 0 h o u s e h o l d s

$0 $50,000 $100,000 $150,000 $200,000 $250,000

98% of make less than $250,000

1 1 2 , 3 6 3 , 0 0 0 h o u s e h o l d s b e l o w $ 2 5 0 , 0 0 0

$0 $250,000

2 0 0 5 U n i t e d S t a t e s

I n c o m e D i s t r i b u t i o n ( L e s s t h a n $ 5 m i l l i o n )



T h e B o t t o m 9 8 % ( I n c o m e l e s s t h a n 2 5 0 t h o u s a n d )

T h e B o t t o m 9 9 . 9 9 % ( I n c o m e l e s s t h a n 5 m i l l i o n )

$0 $50,000 $100,000 $150,000 $200,000 $250,000

98% of make less than$250,000

99.99% of make less than$5,000,000

$0 $5,000,000$250,000 $1,200,000

2 0 0 5 U n i t e d S t a t e s

T h e To p 1 0 B e s t - P a i d : C E O s , Ce l e b r i t i e s , a n d H e d g e Fu n d M a n a g e r s



$0 $1,500,000,000

T h e B o t t o m 9 9 . 9 9 % ( I n c o m e l e s s t h a n 5 m i l l i o n )

$0 $50,000 $100,000 $150,000 $200,000 $250,000

98% of make less than$250,000


$0 $5,000,000$250,000

$1,000,000,000$500,000,000


$50,000,000

I n c o m e l e s s t h a n $ 1 . 5 b i l l i o n

In 2000, you needed $86 million to make the top 400 highest incomes reported to the IRS.

CEOsCelebrities

Hedge Fund Managers

1914 1924 1934 1944 1954 1964 1974 1984 1994 20040%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Woodrow Wilson

WardenHarding

Calvin Coolidge

HerbertHoover

FranklinRoosevelt

HarryTruman

DwightEisenhower

JohnKennedy

LyndonJohnson

Richard Nixon

Gerald Ford

Jimmy Carter

Ronald Reagan

George W. Bush

George Bush

Bill Clinton


War II I r a q Wa r

Gulf

War

In 2004:bottom 90% < $92,315 < top 10%

1 9 2 9 – 2 0 0 4 U n i t e d S t a t e s

I n c o m e / G D P R a t i o



( e xc l u d i n g c a p i t a l g a i n s )

Share of GDP going to bottom 90%

Share of GDP going to top 10%

1914 1924 1934 1944 1954 1964 1974 1984 1994 20040%

10%

20%

30%

40%

50%

60%


War II Iraq War

Gulf

War

Woodrow Wilson

WardenHarding

Calvin Coolidge

HerbertHoover

FranklinRoosevelt

HarryTruman

DwightEisenhower

JohnKennedy

LyndonJohnson

Richard Nixon

Gerald Ford

Jimmy Carter

Ronald Reagan

George W. Bush

George Bush

Bill Clinton

Income less than $95,386 in 2004

Income less than $131,443 in 2004

income less than $316,806in 2004

47%

38%

31%

Recessions are represented by the gray bars. Each bar starts at the peak of a business cycle and ends at the trough

1 9 2 9 – 2 0 0 4 U n i t e d S t a t e s

S h a r e o f G D P f o r b o t t o m 9 9 t h , 9 5 t h , a n d 9 0 t h



( Ta x U n i t s i n c l u d e c a p i t a l g a i n s )

Share of GDP going to bottom 90th



1 9 1 3 - 2 0 0 4 U n i t e d S t a t e s

To p 0 . 1 Pe r c e n t c o m p a r e d t o To p M a r g i n a l Ta x R a t e



1914 1924 1934 1944 1954 1964 1974 1984 1994 2004

6.9%

Percentage of Income going to the Top 0.1 Percent

Top Marginal Tax Rate

7%

35%

8.6%

9.9%94%

U.S. Top 0.1 Percent$0 $50,000 $100,000 $150,000 $200,000 $250,000

$0 $1.1 million

The cut off for the Top 0.1 Percent in 2004:

1 9 1 3 - 2 0 0 4 U n i t e d S t a t e s , C a n a d a , U n i t e d K i n g d o m , Fr a n c e , J a p a n

Pe r c e n t a g e o f I n c o m e g o i n g t o t h e To p 0 . 1 Pe r c e n t



6.9% United States5.2% Canada

6.9% United States

3.3% United Kingdom

6.9% United States

2.0% France

6.9% United States

2.2% Japan

U.S. Top 0.1 Percent$0 $50,000 $100,000 $150,000 $200,000 $250,000

$0 $1.1 million

35% 7%

94%

World War I World War II

Top Marginal Tax Rate for the United States

0%

8%

0%

8%

0%

8%

1914 1924 1934 1944 1954 1964 1974 1984 1994 20040%

8%

1 9 1 6 - 2 0 0 5 U n i t e d S t a t e s

W h a t % o f t h e To p 0 . 0 1 ’s I n c o m e c o m e s f r o m C a p i t a l G a i n s ?



1917 1928 1939 1950 1961 1972 1983 1994 2005

1917 1928 1939 1950 1961 1972 1983 1994 2005


U.S. Top 0.01 Percent (excluding capital gains)$0 $50,000 $100,000 $150,000 $200,000 $250,000

$0 $5.9 millionThe cut off for the Top 0.01 Percent in 2005:

Top 0.01 determined by income that excludes capital gains.

18%

4%

Top 0.01 determined by income that includes capital gains.

51%

14%

Capital Gains

Capital Gains

U.S. Top 0.01 Percent (including capital gains)$0 $50,000 $100,000 $150,000 $200,000 $250,000

$0 The cut off for the Top 0.01 Percent in 2005: $9.5 million

100%

100%

55%

85%


1 9 1 6 - 2 0 0 5 U n i t e d S t a t e s

S o u r c e s o f I n c o m e o f t h e To p 0 . 0 1 Pe r c e n tI n c o m e S o u r c e s i n c l u d i n g C a p i t a l G a i n s



Wage Income34%

Entrepreneurial Income28%

Dividend Income11%

Rental Income3%

Interest Income8%

5%

23%

55%

4%

9%

U.S. Top 0.01 Percent (calculated excluding capital gains)$0 $50,000 $100,000 $150,000 $200,000 $250,000


defined as wages and salaries and pensions (and includes bonuses, stock-option exercises, etc.)

defined as profits from S-Corporations (entities not subject to corporate taxes and taxed only at the individual level) plus profits from Partnerships plus profits from sole proprietorship businesses (Schedule C income) plus farm income

Capital Gains18%4%

1917 1928 1939 1950 1961 1972 1983 1994 2005

1 9 1 6 - 2 0 0 5 U n i t e d S t a t e s

S o u r c e s o f I n c o m e o f t h e To p 0 . 0 1 Pe r c e n tI n c o m e S o u r c e s i n c l u d i n g C a p i t a l G a i n s



Wage Income 34%

Entrepreneurial Income 28%

Dividend Income 11%

Rental Income 3%Interest Income 8%




defined as profits from S-Cor-porations (entities not subject to corporate taxes and taxed only at the individual level) plus profits from Partnerships plus profits from sole propri-etorship businesses (Schedule C income) plus farm income

Capital Gains 18%

1917 1928 1939 1950 1961 1972 1983 1994 20050

10

20

30

40

50

60

70

80

90

100


1 9 1 6 - 2 0 0 5 U n i t e d S t a t e s

S o u r c e s o f I n c o m e o f t h e To p 0 . 0 1 Pe r c e n tI n c o m e S o u r c e s E xc l u d i n g C a p i t a l G a i n s



Wage Income49%

Entrepreneurial Income36%

Dividend Income7%

Rental Income3%

Interest Income6%

14%

31%

40%

5%

10%




defined as profits from S-Corporations (entities not subject to corporate taxes and taxed only at the individual level) plus profits from Partnerships plus profits from sole proprietorship businesses (Schedule C income) plus farm income

1917 1928 1939 1950 1961 1972 1983 1994 2005

1914 1924 1934 1944 1954 1964 1974 1984 1994 2004$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000


Great

Depression

Kore

anW

ar

V i et n a m

Wa r

WorldWar II

Iraq War

1973-74Arab oil embargo

1979Iranian oil embargo

1987 Stock market crash Do

t com

stoc

k boo

m& bust

Gulf

War

WorldWar I

Woodrow Wilson

WardenHarding

Calvin Coolidge

HerbertHoover

FranklinRoosevelt

HarryTruman

DwightEisenhower

JohnKennedy

LyndonJohnson

Richard Nixon

Gerald Ford

Jimmy Carter

Ronald Reagan

George W. Bush

George Bush

Bill Clinton

CBO Average Household

1 9 1 3 – 2 0 0 5 U n i t e d S t a t e s

I n c o m e

Income 2005 US$

Census Average Family

Census Average Household

Census Median Family

Seaz Average Tax Units with cap gains

Census Median Household

Seaz Average Tax Units without cap gains

BLS GDP per Employed person



1914 1924 1934 1944 1954 1964 1974 1984 1994 20040

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

1 9 1 3 – 2 0 0 5 U n i t e d S t a t e s

Po p u l a t i o n

Census Family

BLS Employment Seaz Tax Returns

Census Population

Census Household

Dept of Defense Armed Services

Saez Tax Units

BLS Civilian Labor Force



1914 1934 1954 1974 19940.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1914 1934 1954 1974 1994

1 9 1 3 – 2 0 0 5 U n i t e d S t a t e s

Po p u l a t i o n R a t i o s

# of people per Tax Unit

# of employed people per Tax Unit

# of people per Household

# of employed people per Household

Pe r Ta x U n i t Pe r H o u s e h o l dSingle, married filling jointly, or head of household All the people who occupy a housing unit as

their usual place of residence



2 0 0 5 U n i t e d S t a t e s

I n c o m e D i s t r i b u t i o n ( B o t t o m 9 8 % )



L o g a r i t h m i c S c a l e f o r I n c o m e

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

$100 $1,000 $10,000 $100,000 $250,000

Average (Mean)$63,344

Median$46,326





95% less than$166,000

98% less than$250,000

To t a l 1 1 4 , 3 8 4 , 0 0 0 h o u s e h o l d s

1 9 7 5 - 2 0 0 5 U n i t e d S t a t e s

G r o s s D o m e s t i c P r o d u c t b y I n d u s t r y



Va l u e A d d e d ; Pe r c e n t a g e o f G D P

Wi n n e r s r a n k e d b y % o f G D P i n 2 0 0 5 L o s e r s r a n k e d b y % o f G D P i n 2 0 0 5

1975 1980 1985 1990 1995 2000 2005 1975 1980 1985 1990 1995 2000 2005

Manufacture12.1

Government12.6

Retail Trade6.6

Whole Sale Trade6.0

Transportation, Warehousing2.8

Utilities2.0

Mining1.9

Agriculture, Forestry, Fishing, Hunting1.0

Finance, Insurance, Real Estate, Leasing

15.1

Professional and Business Services

5.7

Educational Services, Health Care, Social Assistance

4.5

Information3.4

Construction 4.6

Arts, Entertainment, Recreation, Accommodation, Food Services

2.8

Other Services2.3

20.4

11.7

7.8

4.5

4.9

3.6

2.3

20.6

15.1

7.8

7.0

3.6

2.3

2.1

3.1

Woodrow Wilson

WardenHarding

Calvin Coolidge

HerbertHoover

FranklinRoosevelt

HarryTruman

DwightEisenhower

JohnKennedy

LyndonJohnson

Richard Nixon

Gerald Ford

Jimmy Carter

Ronald Reagan

George W. Bush

George Bush

Bill Clinton

1 9 1 3 - 2 0 0 6 U n i t e d S t a t e s

R e a l G r o s s N a t i o n a l I n c o m e p e r C a p i t a



I n 2 0 0 0 U S d o l l a r s

1916 1926 1936 1946 1956 1966 1976 1986 1996 2006$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000$38,2002006 Est

$7,1001929 Great

Depression

Kore

anW

ar

V i et n a m

Wa r

WorldWar II

I raq War

Gulf

War

WorldWar I


1973-74Arab oil embargo

1979Iranian oil embargo

1987 Stock market crash

Dot c

om st

ock b

oom&

bust

LyndonJohnson

Richard Nixon

Gerald Ford

Jimmy Carter

Ronald Reagan

George W. Bush

George Bush

Bill Clinton

1 9 6 4 - 2 0 0 6 U n i t e d S t a t e s

Av e r a g e H o u r l y E a r n i n g s



o f p r o d u c t i o n a n d n o n s u p e r v i s o r y w o r k e r s

$16.31

$16.31 $16.24

Adjusted for Inflation using PCE Deflator (2005 dollars)

Adjusted for Inflation using CPI-W (2005 dollars)

Adjusted for Inflation using CPI-W (2005 dollars)

$15.49

$12.96

$16.24$16.76

$2.53

$15.49

$12.96Adjusted for Inflation using PCE Deflator (2005 dollars)

Not Adjusted for Inflation (Constant dollars)

1975 Earning plus Benefits $16.952005 Earning plus Benefits $19.57

Recessions: each bar starts at the peak of a business cycle and ends at the trough

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income distribution in the united states

Business

e b r i t i e s

r n e r smedian

b e r o f e

g e i n c o

g e r sincome

united states av e r

u d e c

c e o s