NCPA - National Center for Policy Analysis

Income Distribution Under Clinton

June 12, 1996

Not everyone's incomes are suffering under President Clinton. While those of the less-affluent have stagnated, average income for the wealthiest Americans climbed 21 percent between 1992 and 1994, according to the Census Bureau -- something of an embarrassment to an administration which emphasized the income gap theme during the 1992 campaign.

In March of this year, a study by RAND researcher Lynn Karoly found that the income gap continued to widen in the 1990s. And Federal Reserve Board Governor Lawrence Lindsey has noted that the income gap has widened under Clinton, after holding steady during the flush years.

  • The share of income going to the top 5 percent of Americans rose from 18.6 percent in 1992 to 20 percent in 1993 and to 21.1 percent in 1994.
  • Average incomes for this group climbed more than $30,000 between 1992 and 1994.
  • Meanwhile, incomes for the bottom fifth have declined in real terms by about $1,000 since 1989.
  • The share of total family income going to the richest five percent of Americans climbed to 21 percent in 1994, up from 18.6 percent when President Bush left office.

Economists say that the poverty rate remains at historically high levels for this point in an economic recovery. As of 1994, it stood at 14.5 percent of the population -- higher than in all but three years of the Reagan and Bush administrations.

While the wealthy are now paying somewhat more in taxes and the poor paying less, the share of income taxes paid by the rich soared in the 1980s -- despite the top marginal tax rate being chopped from 70 percent to 28 percent. The share paid by middle and lower income families dropped over those years, according to the IRS.

Source: John Merline, "Rich Get Richer Under Clinton," Investor's Business Daily, June 12, 1996.

 

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