While we’re on the subject of income inequality, I wanted to draw your attention to the graph above, courtesy of Bruce Krasting who derived the information on which the bar chart is based from the IRS (the annotations on the chart are his).
In my discussions of income inequality I’ve made it pretty clear that I’m as concerned about the concentration of income among the top 3% of income earners as I am concentration in the top .1% of income earners. I wouldn’t consider the chart above as corroborating evidece so much as offering a potential explanation for why, although income inequality (as measure by, say, the Gini coefficient) has been increasing for the least 30 years, we’re rather suddenly hearing a new chorus of whinging about it.
The ongoing economic slowdown is unique in that many of the rich, defined as those making more than $250,000 and less than $1 million in income per year, have been touched by it. Don’t be too surprised if the proposals you hear for dealing with income inequality are more effective at redistributing form the top .1% of income earners to the next couple of percent down the ladder than they are in redistributing from the top 3% of income earners to the bottom 20%.