Chances are, if you were to pull out your latest pay stub, you would see two important lines among the list of taxes taken out of your wages: FICA and MEDFICA. If you were to do the math, these two lines, standing for...
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- The Gains of the Top 1 Percent Don't Come at the Exp...
The Gains of the Top 1 Percent Don't Come at the Expense of Other Americans
There is a pervasive belief that the gains of successful Americans come at the expense of everyone else. However, the economy is not a fixed pie. The data suggests that the incomes of all Americans are higher than they were twenty years ago after adjusting for inflation, and that everyone’s incomes tend to rise and fall with the business cycle. Between 1987 and 2010, the bottom 50 percent’s real income grew by 25 percent, middle-income Americans’ by 46 percent, and upper-middle-income Americans’ by 56 percent.
Clearly, the incomes of the top 1 percent tend to rise more and fall more during the business cycle. This is because most of their income comes from business and investments. Indeed, the top 1 percent’s income fell 26 percent in real terms during the recession, far more than any other income group.
For more charts like the one below, see the second edition of our chart book, Putting a Face on America's Tax Returns.
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