A reader writes:
Please point this reader to this link. Have him download the data for pre-tax and post-tax Household income. Then, have him graph the data for the top 1% (pre-tax and post-tax). Then, have him measure the "much flatter curve" and send in his answer. I'll make a prediction. His answer will be that he can't measure the "much flatter curve" because there isn't one.
In this post the readers comments don't really hold up to scrutiny. If you looked at the same chart, but only went back to the mid-90's as opposed to 1979, you would still see the top 1% income more than double while the middle 60% and bottom 20% remain stagnant, even though tax rates on the highest earners have dropped since the mid 90's. No attempt to nitpick over tax rates can disguise the fact that income inequality has increased massively in the last couple of decades.
Doesn't the fact that the incomes are post-tax make the disparity even more stark?
Post-tax means actual take home pay. Take home pay has not changed one bit for 80% of the population, yet it's increased 5 fold for the top 1%. You can thank your reader for pointing out what may have been missed, but so long as that chart accurately reflects post-tax income, all tax avoidance strategies have been included in the calculations.
So even if the top 1%'s entire increase in take home pay is due to reduced taxes and not increased income, who cares? If one person's take home pay stayed stagnant while another person's increased five-fold, EVEN IF that increase was solely due to reduced taxes, wouldn't you still say the income inequality had increased?
The point of the chart still stands. 80% of the population is stuck in neutral with no increase in income and 1% of the population has been pedal to the medal.