The Latest on Inequality

As our colleague Jared Bernstein has discussed (here and here), an informative new Congressional Research Service (CRS) report analyzes the rise in income inequality between 1996 and 2006.  Like other recent reports, CRS found that income growth at the top far outpaced growth elsewhere on the income ladder.

As Jared also explains, the CRS report finds:

• The single biggest contributor to the growth of inequality during that period was the growth in capital gains and dividend income, which are highly concentrated at the top of the income scale.

• The tax system did less to alleviate rising inequality in 2006 than it did a decade earlier.

The CRS study echoes findings by the Congressional Budget Office that income inequality has grown dramatically in the past three decades.

For more on income inequality, see our recent blog series.  For more on why the tax system is doing less to counter rising inequality than it used to, click here.