Income
Distribution in
the United States
$0 $50,000 $100,000 $150,000 $200,000 $250,000

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Making the Invisible Hand Visible
1913–2004 United States
Av e r a g e I n c o m e
Includes Capital gains
Does not include Capital gains
Income
per Tax Unit
2004 US$
&
bust
om
$50,000
k bo
1987
1973-74
stoc
Stock market crash
1979
Arab oil embargo
com
Iranian oil embargo Iraq
Dot
Wa r
$40,000 G
ar u
W
m l
oo f
am
b
r II
Wa n W
et
ld
or Vi a
$30,000
t-W r
s
Po
rn
Wa rea
1929
Ko
Stock market crash
$20,000
n
io
s World
Gr
es
r
ea
War II
ep
World
t
D
War I
$10,000
Woodrow Calvin Franklin Dwight Lyndon Gerald Ronald Bill
Wilson Coolidge Roosevelt Eisenhower Johnson Ford Reagan Clinton
Warden Herbert Harry John Richard Jimmy George George W.
Hoover Truman Kennedy Nixon Carter Bush Bush
Harding
$0
1914 1924 1934 1944 1954 1964 1974 1984 1994 2004
Average Income Prof. Emmanuel Saez’s Web site, University of California, Berkeley, http://elsa.berkeley.edu/~saez/TabFig2004prel.xls (accessed August 25, 2006)

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Making the Invisible Hand Visible
1947–2004 United States
Fa m i l y I n c o m e b y N u m b e r o f E a r n e r s
(Median 2004 dollars)
Recessions are represented by the gray bars. Each bar starts at the peak of a business cycle and ends at the trough
$120,000
G
World Ir a q
Korean u
am War
Vie tn
War II l
War Wa r
f
W
$100,000 a $100,000
r
$85,178
$80,000
$71,246
4 Earners
$60,000
3 Earners
$40,000
$37,618
2 Earners
$22,349
$20,000 1 Earner
No Earners
$0
1914 1924 1934 1944 1954 1964 1974 1984 1994 2004
Woodrow Calvin Dwight Lyndon Gerald Ronald Bill
Franklin
Wilson Coolidge Eisenhower Johnson Ford Reagan Clinton
Roosevelt
Warden Herbert Harry John Richard Jimmy George George W.
Harding Hoover Truman Kennedy Nixon Carter Bush Bush

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Making the Invisible Hand Visible
2005 United States
Income Distribution (Bottom 98%)
Each equals 500,000 households
112,363,000 households below $250,000
$0 $50,000 $100,000 $150,000 $200,000 $250,000
Median Average (Mean) To t a l 1 1 4 , 3 8 4 , 0 0 0 households
$46,326 $63,344
20% 40% 60% 80% 95% 98%
less than less than less than less than less than less than
$19,178 $36,000 $57,660 $91,705 $166,000 $250,000

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Making the Invisible Hand Visible
2005 United States
Income Distribution (Less than $5 million)
The Bottom 99.99% (Income less than 5 million)
99.99% of
98% of
make less than
make less than
$5,000,000
$250,000
$0 $50,000 $100,000 $150,000 $200,000 $250,000
$0 $250,000 $5,000,000
$1,200,000
The Bottom 98% (Income less than 250 thousand)
98% of
make less than
$250,000
112,363,000 households below $250,000
$0 $50,000 $100,000 $150,000 $200,000 $250,000
$250,000
$0

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Making the Invisible Hand Visible
2005 United States
T h e To p 1 0 B e s t - P a i d :
C E O s , C e l e b r i t i e s , a n d H e d g e Fu n d M a n a g e r s
Income less than $1.5 billion
99.99% of
make less than
$5,000,000
In 2000, you needed $86 million to make the top 400 highest incomes reported to the IRS.
CEOs
Celebrities
Hedge Fund Managers
$0 $50,000,000 $500,000,000 $1,000,000,000 $1,500,000,000
The Bottom 99.99% (Income less than 5 million)
99.99% of
98% of
make less than
make less than
$5,000,000
$250,000
$0 $50,000 $100,000 $150,000 $200,000 $250,000
$5,000,000
$0 $250,000

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Making the Invisible Hand Visible
1929–2004 United States
Income/GDP Ratio
(excluding capital gains)
45% Share of GDP going to bottom 90%
40%
35%
G
u
World Iraq
l
Korean
am War
30% Vie tn
War II f Wa r
War
W
a
25% r
20%
Share of GDP going to top 10%
In 2004:
15%
bottom 90% < $92,315 < top 10%
10%
Woodrow Calvin Franklin Dwight Lyndon Gerald Ronald Bill
5% Wilson Coolidge Roosevelt Eisenhower Johnson Ford Reagan Clinton
Warden Herbert Harry John Richard Jimmy George George W.
Hoover Truman Kennedy Nixon Carter Bush Bush
Harding
0%
1914 1924 1934 1944 1954 1964 1974 1984 1994 2004

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Making the Invisible Hand Visible
1929–2004 United States
Share of GDP for bottom 99th, 95th, and 90th
( Ta x U n i t s i n c l u d e c a p i t a l g a i n s )
Recessions are represented by the gray bars. Each bar starts at the peak of a business cycle and ends at the trough
60%
Share of GDP going
to bottom 99th
income less than $316,806
in 2004
50%
Share of GDP going to 47%
bottom 95th
Income less than $131,443
in 2004
40%
38%
Share of GDP going to
bottom 90th
Income less than $95,386
31%
in 2004 G
30% u
l
f
World Ir a q
Korean
am War
Vie tn
War II War W Wa r
a
20% r
10%
0%
1914 1924 1934 1944 1954 1964 1974 1984 1994 2004
Woodrow Calvin Dwight Lyndon Gerald Ronald Bill
Franklin
Wilson Coolidge Eisenhower Johnson Ford Reagan Clinton
Roosevelt
Warden Herbert Harry John Richard Jimmy George George W.
Harding Hoover Truman Kennedy Nixon Carter Bush Bush

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Making the Invisible Hand Visible
1913-2004 United States
To p 0 . 1 Pe r c e n t c o m p a r e d t o To p M a r g i n a l Ta x R a t e
9.9%
94%
8.6%
6.9%
Top Marginal Tax Rate
35%
7%
Percentage of Income going to the Top 0.1 Percent
1914 1924 1934 1944 1954 1964 1974 1984 1994 2004
The cut off for the Top 0.1 Percent in 2004:
U.S. Top 0.1 Percent
$0 $50,000 $100,000 $150,000 $200,000 $250,000
$0 $1.1 million

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Making the Invisible Hand Visible
1 9 1 3 - 2 0 0 4 U n i t e d S t a t e s , C a n a d a , U n i t e d K i n g d o m , Fr a n c e , J a p a n
Pe r c e n t a g e o f I n c o m e g o i n g t o t h e To p 0 . 1 Pe r c e n t
World War I World War II
8% U.S. Top 0.1 Percent
6.9% United States
$0 $50,000 $100,000 $150,000 $200,000 $250,000
$0 $1.1 million
5.2% Canada
0%
8%
6.9% United States
3.3% United Kingdom
0%
8%
6.9% United States
2.0% France
0%
8%
6.9% United States
2.2% Japan
0%
1914 1924 1934 1944 1954 1964 1974 1984 1994 2004
94%
Top Marginal Tax Rate for the United States
35%
7%

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Making the Invisible Hand Visible
1916-2005 United States
W h a t % o f t h e To p 0 . 0 1 ’s I n c o m e c o m e s f r o m C a p i t a l G a i n s ?
World War II
World War I
100% Top 0.01 determined by income that
excludes capital gains.
55%
18% Capital Gains
4%
1917 1928 1939 1950 1961 1972 1983 1994 2005
U.S. Top 0.01 Percent (excluding capital gains)
$0 $50,000 $100,000 $150,000 $200,000 $250,000
The cut off for the Top 0.01 Percent in 2005: $5.9 million
$0
U.S. Top 0.01 Percent (including capital gains)
$0 $50,000 $100,000 $150,000 $200,000 $250,000
The cut off for the Top 0.01 Percent in 2005:
$0 $9.5 million
100% Top 0.01 determined by income that
85%
includes capital gains.
51% Capital Gains
14%
1917 1928 1939 1950 1961 1972 1983 1994 2005

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Making the Invisible Hand Visible
1916-2005 United States
S o u r c e s o f I n c o m e o f t h e To p 0 . 0 1 Pe r c e n t
Income Sources including Capital Gains
World War I World War II
Wage Income defined as wages and salaries and pensions (and
includes bonuses, stock-option exercises, etc.)
34%
5%
Entrepreneurial Income defined as profits from S-Corporations (entities
28% not subject to corporate taxes and taxed only at
23%
the individual level) plus profits from Partnerships
plus profits from sole proprietorship businesses
(Schedule C income) plus farm income
Capital Gains
18%
4%
55%
Dividend Income
11%
Interest Income
9% 8%
Rental Income
3%
4%
1917 1928 1939 1950 1961 1972 1983 1994 2005
U.S. Top 0.01 Percent (calculated excluding capital gains)
$0 $50,000 $100,000 $150,000 $200,000 $250,000
The cut off for the Top 0.01 Percent in 2005: $5.9 million
$0

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Making the Invisible Hand Visible
1916-2005 United States
S o u r c e s o f I n c o m e o f t h e To p 0 . 0 1 Pe r c e n t
Income Sources including Capital Gains
100 Rental Income 3%
Interest Income 8%
90
Dividend Income 11%
80
Capital Gains 18%
70
60 Entrepreneurial
Income 28%
50 defined as profits from S-Cor-
porations (entities not subject
to corporate taxes and taxed
40
only at the individual level)
plus profits from Partnerships
30 plus profits from sole propri-
etorship businesses (Schedule
C income) plus farm income
20
Wage Income 34%
10 defined as wages and salaries and
pensions (and includes bonuses,
stock-option exercises, etc.)
0
1917 1928 1939 1950 1961 1972 1983 1994 2005
U.S. Top 0.01 Percent (calculated excluding capital gains)
$0 $50,000 $100,000 $150,000 $200,000 $250,000
The cut off for the Top 0.01 Percent in 2005: $5.9 million
$0

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Making the Invisible Hand Visible
1916-2005 United States
S o u r c e s o f I n c o m e o f t h e To p 0 . 0 1 Pe r c e n t
I n c o m e S o u r c e s E xc l u d i n g C a p i t a l G a i n s
World War I World War II
Wage Income defined as wages and salaries and pensions (and
includes bonuses, stock-option exercises, etc.)
49%
14%
Entrepreneurial Income defined as profits from S-Corporations (entities
36% not subject to corporate taxes and taxed only at
31% the individual level) plus profits from Partnerships
plus profits from sole proprietorship businesses
(Schedule C income) plus farm income
40%
Dividend Income
7%
Interest Income
10% 6%
Rental Income
3%
5%
1917 1928 1939 1950 1961 1972 1983 1994 2005
U.S. Top 0.01 Percent (calculated excluding capital gains)
$0 $50,000 $100,000 $150,000 $200,000 $250,000
The cut off for the Top 0.01 Percent in 2005: $5.9 million
$0

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Making the Invisible Hand Visible
1913–2005 United States
Income
Income
2005 US$
BLS GDP per
$90,000 Employed person
oom
&b
kb
ust
toc
$80,000 CBO
ms
1987 Average Household
t co
Stock market crash
Do
Census
1979
$70,000 Average Family
Iranian oil embargo
1973-74 Census
Arab oil embargo Average Household
$60,000
Census
Median Family
Seaz Average Tax
$50,000 Units with cap gains
Census Median
Household
Seaz Average Tax Units
without cap gains
$40,000
G
u
ar l
W
$30,000
m f
1929
na Iraq
Stock market crash
et
War
Vi
W
$20,000
rn
a
Wa rea
r
Ko
n World
World sio
$10,000
es War II
Gr
War I pr
ea
De
t
$0
1914 1924 1934 1944 1954 1964 1974 1984 1994 2004
Woodrow Calvin Dwight Lyndon Gerald Ronald Bill
Franklin
Wilson Coolidge Eisenhower Johnson Ford Reagan Clinton
Roosevelt
Warden Herbert Harry John Richard Jimmy George George W.
Harding Hoover Truman Kennedy Nixon Carter Bush Bush

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Making the Invisible Hand Visible
1913–2005 United States
Po p u l a t i o n
300,000,000 Census Population
250,000,000
200,000,000
BLS Civilian
Labor Force
150,000,000
Saez Tax Units
BLS Employment
Seaz Tax Returns
Census Household
100,000,000
Census Family
50,000,000
Dept of Defense
Armed Services
0
1914 1924 1934 1944 1954 1964 1974 1984 1994 2004

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Making the Invisible Hand Visible
1913–2005 United States
Po p u l a t i o n R a t i o s
Pe r Ta x U n i t Pe r H o u s e h o l d
Single, married filling jointly, or head of household All the people who occupy a housing unit as
their usual place of residence
4.5
4.0
3.5 # of people
per Household
3.0 # of people
per Tax Unit
2.5
2.0
# of employed people
# of employed people
per Household
1.5 per Tax Unit
1.0
0.5
0.0
1914 1934 1954 1974 1994 1914 1934 1954 1974 1994

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Making the Invisible Hand Visible
2005 United States
Income Distribution (Bottom 98%)
Logarithmic Scale for Income
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
$100 $1,000 $10,000 $100,000 $250,000
Median Average (Mean)
To t a l 1 1 4 , 3 8 4 , 0 0 0 households
$46,326 $63,344
20% 40% 60% 80% 95% 98%
less than less than less than less than less than less than
$19,178 $36,000 $57,660 $91,705 $166,000 $250,000

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Making the Invisible Hand Visible
1975-2005 United States
Gross Domestic Product by Industry
Va l u e A d d e d ; Pe r c e n t a g e o f G D P
Losers ranked by % of GDP in 2005
Wi n n e r s r a n k e d b y % o f G D P i n 2 0 0 5
1975 1980 1985 1990 1995 2000 2005 1975 1980 1985 1990 1995 2000 2005
Finance, Insurance, 20.4
Real Estate, Leasing
Government
15.1 15.1
12.6
20.6
Manufacture
Professional and 12.1
11.7
Business Services
5.7
Educational Services, Retail Trade
Health Care, Social Assistance 7.8 7.8
6.6
4.5
Whole Sale Trade
Construction 7.0
6.0
4.9
4.6
Transportation,
Information Warehousing
4.5
3.4
2.8
3.6
Arts, Entertainment, Recreation,
Accommodation, Food Services Utilities
3.6
2.8 2.0
2.3
Other Services Mining
1.9
2.3 2.1
2.3
Agriculture, Forestry,
Fishing, Hunting
3.1 1.0

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Making the Invisible Hand Visible
1913-2006 United States
Real Gross National Income per Capita
In 2000 US dollars
$40,000
$38,200
oom
2006 Est
&b
kb
ust
toc
Iraq
$35,000
ms
War
t co
1987
Do
Stock market crash
$30,000
1979
G
Iranian oil embargo
u
$25,000 1973-74
l
Arab oil embargo
f
$20,000 W
a
ar r
W
m
$15,000
na
et
Vi
1929
rn
Wa rea
Stock market crash
$10,000
Ko
World
War II
$7,100
1929 n
$5,000 World sio
es
Gr
War I pr
ea
De
t
$0
1916 1926 1936 1946 1956 1966 1976 1986 1996 2006
Woodrow Calvin Dwight Lyndon Gerald Ronald Bill
Franklin
Wilson Coolidge Eisenhower Johnson Ford Reagan Clinton
Roosevelt
Warden Herbert Harry John Richard Jimmy George George W.
Harding Hoover Truman Kennedy Nixon Carter Bush Bush

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Making the Invisible Hand Visible
1964-2006 United States
Av e r a g e H o u r l y E a r n i n g s
of production and nonsuper visor y workers
$16.76
$16.24
Adjusted for Inflation using CPI-W (2005 dollars) $15.49
Not Adjusted for Inflation (Constant dollars) $2.53
$16.31
$16.24
Adjusted for Inflation using CPI-W (2005 dollars) $15.49
Adjusted for Inflation using PCE Deflator (2005 dollars) $12.96
2005 Earning plus Benefits $19.57
1975 Earning plus Benefits $16.95 $16.31
Adjusted for Inflation using PCE Deflator (2005 dollars) $12.96
Recessions: each bar starts at the peak of a business cycle and ends at the trough
Lyndon Gerald Ronald Bill
Johnson Ford Reagan Clinton
Richard Jimmy George George W.
Nixon Carter Bush Bush

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