PF&Investing » adjusted gross income http://pfinvesting.com common sense in personal finance and investing Sun, 27 Mar 2011 01:04:44 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Rich gets richer, poor gets poorer http://pfinvesting.com/2007/10/12/rich-richer-poor-poorer/ http://pfinvesting.com/2007/10/12/rich-richer-poor-poorer/#comments Fri, 12 Oct 2007 17:22:39 +0000 Roy http://manojitroy.com/2007/10/12/rich-richer-poor-poorer/ A recent Wall Street Journal report shows that the top 1% of the wealthiest people in America collared 21.2% of the entire nation’s income in 2005, a sharp rise from 19% the year before (also above the previous high of 20.8% in 2000). By contrast, the bottom 50% of the earners managed only 12.8% of all income, a drop from 13.4% in 2004 (and from 13% in 2000).

These estimates are based on the “adjusted gross income” from tax returns filed with IRS (thus excluding pre-tax contributions to retirement accounts, alimony payments etc). The data also show that the “median” income value – half earn below this income and half above – dropped 2% to $30,881 between 2000 and 2005, whereas the income level of the top 1% grew 3% to $364,657.

Such disparity is blamed on gaps in the skill level, which puts people with higher skills at an advantage because of the technological changes, and also increasing globalization and communication. Another related issue is that such technological advances trigger a stock market boom, which again favors a select group of people in high paying positions.

Read the report here.

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