As the Rich Bounce Back, the Middle Class Stays Stagnant
By Richard Rubin and Keith Collins
| June 18, 2015
The IRS recently released its latest income data on U.S. households. The numbers, which go through 2012, show that the top sliver of taxpayers recovered quickly from the recession. That's not what happened for everyone else.
Income Concentration by Percentile
U.S. household income is getting increasingly concentrated at the top. That was especially true in 2012, when there was a race to sell valuable assets before the top capital gains tax rate jumped to 23.8 percent from 15 percent.
Income Thresholds from the Middle Class to the Top Earners
It takes more to be at the top these days. The threshold level at which someone enters the top 0.1 percent is going up, while the minimum income to enter the top 50 percent is slowly falling.
Tax Rates for Top Earners, 2012
The income tax is progressive, mostly. Effective tax rates rise with income before dipping for the very richest who pay capital gains rates (before the increases Obama sought took effect in 2013). This doesn't include payroll taxes and state and local taxes, which tend to fall more heavily on middle-income and lower-income households.