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Properly Measured Income Has Grown for All Income Groups

Created on July 29, 2013

Properly Measured Income Has Grown for All Income Groups

Properly Measured, Income Has Grown for All Income Groups

A rudimentary examination of income growth from 1979 to 2007 shows a 33 percent decline for the bottom quintile. However, after adjusting for household size, taxes, transfers, and health insurance, income for the bottom quintile increased by 26.4 percent.

Household Size Adjusted, Post-Tax, Post-Transfer, Plus Health Insurance

Household Size Adjusted, Post-Tax, Post-Transfer

Household Size Adjusted, Pre-Tax, Post-Transfer

Household, Pre-Tax, Post-Transfer

Tax Unit, Pre-Tax, Pre-Transfer

Income growth, 1979–2007, by income quintile

Source: Richard V. Burkhauser, Jeff Larrimore, and Kosali I. Simon, “A ‘Second Opinion’ on the Economic Health of the American Middle Class,” National Tax Journal, March 2012, Table 4, Panel D, p. 23, http://ntj.tax.org/wwtax/ntjrec.nsf/009a9a91c225e83d852567ed006212d8/ 30212f14664082b1852579b5006904e1/$FILE/A01_Larrimore.pdf (accessed June 3, 2013).

Chart 4   |   CPI DP 12   |   heritage.org