Increase in Income Inequality Highest on Record

From the Economic Policy Institute, summarizing Congressional Budget Office data:

Earlier this week, the Congressional Budget Office (CBO) updated its authoritative data series on household incomes (1979-2005). The new data—highly regarded as a particularly complete source of information on this important topic—reveal a sharp increase in income inequality over the past few years. In fact, the increase in income inequality (both pre-and post-tax) as measured by the change in the shares of income going to different income classes, was greater from 2003 to 2005 than over any other two-year period covered by the CBO data. Over these years, an amazing $400 billion in pre-tax dollars was shifted from the bottom 95% of households to those in the top 5% (all income data in this report are inflation adjusted and in 2005 dollars). In other words, had income shares not shifted as they did, the income of each of the 109 million households in the bottom 95% would have been $3,660 higher in 2005 . . .

Back in 1979, the post-tax income of the top 1% was eight times higher than that of middle-income families and 23 times higher than the lowest fifth. In 2005, those ratios grew to 21 (top compared to middle) and 70 (top to bottom), a vast increase in the distance between income classes.

In looking at the increase in income inequality from 1979-2005, I can't imagine a more powerful indictment of the economic policies of Reagan, Bush 41, Clinton, and Bush 43. Not to mention the bipartisan majorities of both houses of congress that enabled those policies.