The national debate about income, wealth and taxes is crowded with percentiles: the top percentile, the bottom 50 percent, and so forth. But percentiles are useless, or at least distracting, when you don't what kind of income they correspond to.
For example, how much money does somebody in the 65th percentile make? Or, if your family makes $100,001 exactly, where do you rank among all tax payers? This handy spreadsheet prepared by the Tax Policy Center for the New York Times explains.
Catherine Rampell uses the data to make an important point: Income inequality accelerates at the top. Somebody in the 95th percentile makes 4X more than the median taxpayer. But somebody in the percentile 99.9 makes 10X more than the folks in the 95th.
Those who aspire to hop from the 30th percentile to the 35th percentile would need to increase their cash income by $4,000 annually (or by about 17 percent); those who aspire to hop from the 91st percentile to the 96th percentile would require an increase of $324,900 (or 171 percent). In other words, at least in dollar terms, there is much greater inequality at the very top of the income scale than at the bottom or in the middle...
So when the 95th-percentilers think of their incomes in the context of what their richer neighbors are earning, this cohort doesn't feel very rich.
Read the full story at New York Times.