The divergence of wages and productivity growth

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The higher income brackets saw drastic growth in their income while the bottom 90% of us actually saw our real income decline from 1980 until 2013. The average income of the bottom 90% of us fell 5% from $33,478 to $31,652. The average household income of every other bracket rose. The average income of the next 9% rose from 42% from $126k to $178k. The average income of the bottom nine tents of the top 1% rose 94%, up to $657k. The bottom nine tenths of the top 0.1% saw its average income rise 183% to just over $3 million/year, and the average income of the top 0.01% rose a stunning 325% to nearly $25 million per year. This data is drawn from an update that Professor Emmanuel Saez released to data accompanying a paper published by himself and Thomas Piketty entitled Income Inequality in the United States, 1913-2002 (2004).

Income Growth in the United States by Bracket Between 1980 and 2013

During a recent Bloomberg Television interview, Bill Gross (Pimco managing director) and Larry Fink (Blackrock CEO) concluded that the return on capital relative to labor was excessive. Mr. Gross now expects the nominal return on financial assets, such as equities and bonds, to plummet 50 percent. 

Robert Reich, Labor Secretary under President Bill Clinton, suggests the top 1 percent received 45 percent of the economic gains during the Clinton administration and 65 percent during the Bush administration. In addition, the Census Bureau reports real median wages increased a mere one-third of 1 percent annually during this time.

Reagonomics and Clintonomics Failed the US

But there are nearly 14,000 tax filers who earned more than $12 million in 2012 as members of the best-paid 0.01 percent of all taxpayers, according to the IRS, and about 1,360 who earned over $62 million that year. Their vast earnings were not taxed any more heavily – and indeed, they paid a lower overall income tax rate than their merely one-percent brethren. It is the first time the IRS has ever broken out income tax data at the very top end of the earnings spectrum. Previous releases have shown the top 1 percent and the top 0.1 percent of filers, but the new data drill deeper. There were a little under 1,400 income tax returns filed in that very richest sliver of data in 2012, the agency reports, with an average income of roughly $161 million for the year.

New Data Offer First Infuriating Glimpse At How The Richest 0.001 Percent Pay Income Taxes | ThinkProgress