And the rich just keep getting richer …

This graph from the Congressional Budget Center for Budget and Policy Priorities shows the most recent date on U.S. Income Inequality. This includes new data from 2006. This is pretty astounding. It shows just exactly how much of the country’s income has gone to the richest and poorest Americans and of course the middle classes.

Let’s assume that all U.S. incomes had all increased at the same rate as the lowest quintile.

lowest fifth: $1,639
second fifth: $3,000 to $33,000
middle fifth: $5,000 to $48,000
fourth fifth : $6,000 to $62,000
fifth fifth: $11,000 to $110,000
top fifth: $37,000 to $374,000

Now let’s see what it would look like if we’d all experienced the same increase as the top 1%.

lowest fifth: $38,000 increase to $53,000
2nd fifth: $77,000 increase to $107,156
3rd fifth: $110,000 increase to $152,000
4th fifth: $144,000 increase to $200,00
5th fifth: $253,000 increase to $352,000
Top fifth: $862,000 increase to 1.2m total

This basically makes the income inequality in this country the widest on record. The Center’s release also included this:

Taken together with prior research, the new data suggest greater income concentration at the top than at any time since 1929

If you want to check out how our US income inequality compares to the rest of the world, check out the GINI Index here in the CIA World Fact Book. The GINI index is a measure of income/wealth distribution. The lower the coefficient, the more equal the wealth distribution. So zero would mean perfect equality where everyone has the exact same income. One means there is perfect inequality or one person has all the income and the rest of the folks have none.

In 2007, the US had a GINI coefficient of 45. Denmark had a 24 in 2005. UK had 34 in 2005. Needless to say, we are up there with most of the world’s tin pot dictatorships on income equality. Uganda and Venezuela have ratings similar to ours.

In view of these numbers, I would say the populist rage overtaking the country isn’t about taxes. It may not even be about government spending. It is probably about the fact that most Americans are losing ground. This in itself wouldn’t be a problem, but not only are the majority of us losing ground, a select few are gaining hugely. It is also undeniable that this gain has come the political class who becomes wealthy themselves enabling policy that widens the inequality gap.