the reagan revolution in CBO numbers :

"between 1979 and 2007, income grew by:

• 275 percent for the top 1 percent of households,
• 65 percent for the next 19 percent,
• Just under 40 percent for the next 60 percent, and
• 18 percent for the bottom 20 percent.

'


The share of income going to higher-income households rose, while the share going to lower-income households fell.

• The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.
• Most of that growth went to the top 1 percent of the population.
• All other groups saw their shares decline by 2 to 3 percentage points.

Market Income Shifted Toward Higher-Income Households

Shifts in the distribution of market income underlie most of the changes in the distribution of after-tax income. (Market income—or income before taxes and transfers—includes labor income, business income, capital income, capital gains, and income from other sources such as pensions.)

• Each source of market income was less evenly distributed in 2007 than in 1979.

• More concentrated sources of income (such as business income and capital gains) grew faster
•  than less concentrated sources

      (such as labor income).

Government Transfers and Federal Taxes Became Less Redistributive

Government transfers and federal taxes both help to even out the income distribution. Transfers boost income the most for lower-income households, while taxes claim a larger share of income as people's income rises.
In 2007, federal taxes and transfers reduced the dispersion of income by 20 percent, but that equalizing effect was larger in 1979.

• The share of transfer payments to the lowest-income households declined.
• The overall average federal tax rate fell."

In the early years of the

period, market income concentration increased almost

exclusively as a result of an increasing concentration of

separate income sources. The increased concentration of

labor income alone accounted for more than 90 percent

of the increase in the concentration of market income

in those years. In the middle years of the period, an

increase in the concentration within each income source

accounted for about one-half of the overall increase in

market income concentration; a shift to moreconcentrated

sources explains the other half. In the later

years, an increase in the share of total income from more

highly concentrated sources, in this case capital gains,

accounted for about four-fifths of the total increase in

concentration. Over the 1979–2007 period as a whole,

an increasing concentration of each source of market

income was the more significant factor, accounting

for four-fifths of the increase in market income

concentration."

"Between 1979 and 2007, the

share of income coming from capital gains and business

income increased, while the share coming from labor

income and capital income decreased."