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.
Bottom 50% 1% .1% .01% Top .001% income percentile Share of total U.S. income 68,050,000 filers 1,361 filers in 2012 13,610 filers 136,100 filers 1,361,000 filers The top 136,100 filers earned about the same share of the total adjusted gross income in 2012 as the bottom 68 million While the top earners’ share of the total income has bounced back since the 2009 low, the share of the bottom half has only shrunk further 10% 15% 20% high before recession recessionlow 2012 2009 2007
 
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.
0 300k 600k 900k 1.2m Top 50% Top 1% Top 0.1%incomepercentile 2012 2009 2007 37% 136,100filers 1.4m filers 68m filers Note: Dollar amounts are adjusted for inflation to 1990 dollars $1.4m $895.4k 37% from 2007 ▼ $1.2m ▲ $268.9k $214.5k 20% ▼ $247.5k 15% ▲ $22.4k $20.8k 7% ▼ $20.5k 1% ▼
 
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.
0 5 10 15 20% 50% 40% 30% 25% 20% 10% 5% 4% 3% 2% 1% .1% .01% Top .001%incomepercentile 17.6% tax rate 19.5 21.7 22.8 22.5 22.0 21.4 21.0 19.2 17.0 16.4 15.8 15.0 14.3