U.S. Data Show Superrich Doubled Incomes as Middle Class Lost Ground

A comprehensive new report released by the Congressional Budget Office (CBO) depicts a stark transformation of the US economy over the past four decades, revealing a widening gap in which the wealthiest households expanded their economic share while the middle class steadily lost ground, Nick Lichtenberg reported for Fortune.

Even after accounting for taxes and government transfers, the middle class has seen its relative position weaken.

The data, spanning 1979 through 2022, show that the distribution of national income has become heavily skewed toward the top.

The top 1% of households increased their share of income before taxes and transfers from 9% in 1979 to 18% in 2022, effectively doubling their slice of the economic pie.

Meanwhile, the share going to the lowest income quintile fell from 5% to 4%, indicating that much of the compression occurred in the middle.

Even after accounting for taxes and government transfers, the middle class has seen its relative position weaken.

The share of income after transfers and taxes held by the “middle three” income quintiles declined by 6 percentage points over the 43-year period. By contrast, the share of after-tax income going to the top 1% doubled from 7% to 14%.

The disparity is even more pronounced among the ultra-wealthy. While average income rose for all groups since 1979, income growth at the top far outpaced the rest.

Income for the highest quintile more than doubled, while average income for the top 0.01% of earners increased more than sevenfold after taxes and transfers.