Monday, May 04, 2009

Chart of the Week: Back to the Future

The top chart shows the gap in incomes between the top 1% and the rest of us proles.  The income gap reached record levels in 2006--a whopping 976 times the lower income.  One of the reasons for this condition is displayed in the lower chart, a historically low top marginal tax rate.   The average after tax income of  plutocrats more than tripled in 2006, an increase of 256% while the average after tax income of the poorest fifth only rose 11%. [source: CBO]  Notice the correlations in both charts with the Roaring Twenties, a previous era of excessive debt creation and low taxes on the rich.
[source:  www.visualizingeconomics.com/2008/07/13/income-gap-and-marginal-tax-rate-1917-2006/]