Share of income earned by the top 10% of US Households: 1917-2008
Source: Emmanuel Saez, Department of Economics, University of California, Berkeley
We have returned to levels of inequaity unseen since before the Great Depression. We all know how that turned out. It wasn't pretty.
I had the good fortune to grow up during that period between 1950 and 1980 when most Americans participated in the massive expansion of our economy. Marginal income tax rates approached 90% for the top earners even under the Republican Administration of Dwight Eisenhower, yet the economy grew rapidly, and incomes rose across the board. Since Ronald Reagan was elected in 1980 a larger and larger share of income growth accrued to the people at the top of the pyramid. Top tax rates were cut repeatedly under Republican Adminstrations, and the primary source of profits in the American economy has shifted to the financial sector away from manufacturing and non-financial services. When economies are dominated by finance, the wealthy, who have much more to invest, will obviously benefit the most.
The poorest Americans, those in the bottom fifth of earners, only saw their incomes grow by a little over one percent (in real terms) between 1980 and 2011. For people in the middle fifth, average incomes grew about 11% over those same three decades. The Census Bureau doesn't report an average for people in the top-fifth, just the boundary that distinguishes the fourth and fifth quintiles. For the least well-off people in the top-fifth of earners, their comparable growth rate was 41%.
http://www.census.gov/hhes/www/incom...H01AR_2011.xls