But has income accumulated in the hands of the few at the expense of a growing underclass? Table A-1 shows the opposite: The percentage of American households in each of the upper two income brackets has increased, while the percentage of households in each of the lower seven income brackets has decreased
There simply are more "rich" households in America today and fewer "poor" households.
In 1967, only 5.4 percent of households were in the "$100,000 and over" income bracket (in inflation-adjusted 2007 dollars). In 2007, 20.2 percent were in that bracket -- making it now the most populated of all brackets.
One out of every five American households is "rich."
In 1967, only 7.7 percent of American households were in the second-highest bracket, earning between $75,000 and $99,999 per year. By 2007, 11.9 percent were in that bracket.
So in 1967, 13.1 percent of American households earned more than $75,000, and 86.9 percent earned less. In 2007, 32.1 percent of American households earned more than $75,000, and 67.9 percent earned less.
As a share of the population, wealthier people today are almost two-and-a-half times as numerous as they were when the hippie generation was celebrating its Summer of Love.
But what about Obama's claim that in the last growth cycle median household income never rose above its peak from the previous cycle? There is truth in this.
"Between 2006 and 2007, real median household income rose from $49,568 to $50,233 (Figure 1-Table 1) -- a level not statistically different from the 1999 pre-recession income peak," says the Census Bureau's report.
The Figure 1 referred to is a graph that shows the relationship between recessions and real median household income. Its lesson is simple: When the economy declines, household incomes decline. When the economy grows, household incomes grow. Mostly, our free economy has grown, so incomes have grown.
Obama's class-war budget is based on his belief that he can use the federal tax code to keep incomes down -- and still have the economy go up. |