A new report from the nonpartisan Congressional Research Service documents the growing gap between rich and poor — and how U.S. tax policy is deepening the divide.
Percent by which average after-tax income, adjusted for inflation, grew between 1996 and 2006, according to the new report: 25
Percent change in after-tax income for the poorest fifth of tax filers during that period: -6
Average income for those bottom earners in 2006: $8,461
Percent change for the middle fifth of tax filers: +11
Average income for those middle earners in 2006: $39,301
Percent change for the top 0.1 percent of tax filers: +96
Average income for those top earners in 2006: $5,651,740
Percent increase in after-tax income inequality: 11
Percent by which taxes reduced income inequality in 1996: 5
In 2006: less than 4
Of the 10 states with the greatest income inequality, number in the South: 5*
Percent of the annual income earned by the top 0.1 percent that comes from wages and salaries: 18.6
Percentage-point increase in proportion of income from capital gains — investments in stocks, bonds, real estate and other assets — for the top 0.1 percent from 1996 to 2006: 6
Rank of capital gains among the biggest contributors to the increase in overall income inequality: 1
Year in which the Bush administration cut the capital gains tax from 20 to 15 percent: 2003
Number of times since then that this tax cut has been extended: 2
Percentage rate to which President Reagan increased the capital gains tax as part of his 1986 tax reform plan: 28
* New York is the top state in terms of income inequality, followed by Alabama, Mississippi, Massachusetts, Tennessee, New Mexico, Connecticut, California, Texas and Kentucky.
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