Some new figures from the US Congressional Budget Office shows that the only group that has increased its share of after tax income is the top 20%.

In a true indication of the worldwide income gap, the CBO shows that the top quintile (20%) in the US saw their share of after tax income rise [1] between 1979 and 2007.

Worse still the top 1% (those that the Occupy movement have such strong feelings about) has seen its income increase by a staggering 275%.

The other four quintiles, the remaining 80%, have seen their income rise but their overall share fall, which is being blamed on a shift in market income towards the high earners and a less redistributive tax system.

So, how does the claim that trickle down works stack up with those figures? How can you square these numbers with the claim that giving the top earners and businesses free rein helps lift everyone, you know the one where we’re all sat in a boat and benefit as the tide of good economic times rises?

Share of Income

These results show just the opposite and backs up the concept of the 'Consumer Hourglass Theory' (where there's only very rich and very poor people and not much in between).

But still the politicians race around the globe trying to prop this system up, hoping that their paymasters will smile kindly on them. But worse still, the people that help them are probably in those lower quintiles being shafted as they go about their jobs believing they are being rewarded.

The findings are:

CBO finds that, between 1979 and 2007, income grew by:

  • 275 percent for the top 1 percent of households,
  • 65 percent for the next 19 percent,
  • Just under 40 percent for the next 60 percent, and
  • 18 percent for the bottom 20 percent.

But it's the share of income that is important (see the graph above), not just the amounts.

'CBO's mandate is to provide the Congress with:
Objective, nonpartisan, and timely analyses to aid in economic and budgetary decisions on the wide array of programs covered by the federal budget
The information and estimates required for the Congressional budget process.'


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