![]() ![]() Specific colors have been used to represent certain income concepts in the exhibits and Figure S-1: Green denotes income before transfers and taxes, blue denotes means-tested transfers, orange denotes federal taxes, and purple denotes income after transfers and taxes. ![]() For additional definitions, see Appendix B. Unless this report indicates otherwise, “income” refers to household income before accounting for means-tested transfers and federal taxes, “transfers” refers to means-tested transfers, and “taxes” refers to federal taxes. To convert dollar amounts to 2019 dollars, the Congressional Budget Office used the price index for personal consumption expenditures from the Bureau of Economic Analysis. Unless this report indicates otherwise, all years referred to are calendar years.Īll dollar amounts are expressed in 2019 dollars and are rounded to the nearest hundred. Numbers in the text, figure, table, and exhibits may not add up to totals because of rounding. (The Gini coefficient is a standard measure of income inequality that summarizes an entire distribution in a single number that ranges from zero to one.) The degree to which transfers and taxes reduced income inequality increased over that same period. Income inequality, as measured by the Gini coefficients for income both before and after transfers and taxes, rose between 19. Average federal tax rates fell between 19 across the income distribution, with the sharpest decline in the lowest quintile. Higher-income households typically paid a higher average federal tax rate than lower-income households. As a percentage of income before transfers and taxes, means-tested transfers rose over the 41-year period, primarily driven by an increase in Medicaid spending. Between 19, households in the lowest quintile received more than half of all means-tested transfers. Means-tested transfers are cash payments and in-kind benefits from federal, state, and local governments that are designed to assist individuals and families who have low income and few assets. Between 19, average income, both before and after means-tested transfers and federal taxes, grew for all quintiles (or fifths) of the income distribution, but it increased most among households in the highest quintile. Households at the top of the income distribution received significantly more income than households at the bottom. This report presents the distributions of household income, means-tested transfers, and federal taxes between 19 (the most recent year for which tax data were available when this analysis was conducted). The Congressional Budget Office regularly analyzes the distribution of income in the United States and how it has changed over time.
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