![Page 1: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/1.jpg)
Congressional Budget Office
Trends in the Distribution of Household Income
University of Michigan’s65th Annual Economic Outlook Conference
Ann Arbor, MI
November 16, 2017
Kevin PereseTax Analysis Division
As developmental work for analysis for the Congress, the information in this presentation is preliminary and is being circulated to stimulate discussion and critical commentary.
![Page 2: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/2.jpg)
1CO N GR ES S IO N A L B UDGE T O F F IC E
Thirty Years of Distributional Analyses
![Page 3: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/3.jpg)
2CO N GR ES S IO N A L B UDGE T O F F IC E
*
Distribution of Income, 2013
![Page 4: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/4.jpg)
3CO N GR ES S IO N A L B UDGE T O F F IC E
*
Distribution of Income, 2013
![Page 5: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/5.jpg)
4CO N GR ES S IO N A L B UDGE T O F F IC E
*
Distribution of Income, 2013
![Page 6: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/6.jpg)
5CO N GR ES S IO N A L B UDGE T O F F IC E
*
Distribution of Income, 2013
![Page 7: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/7.jpg)
6CO N GR ES S IO N A L B UDGE T O F F IC E
Income Before Transfers and TaxesMarket Income: Income from labor, business, capital (including capital gains), and other nongovernmental income sourcesSocial Insurance Benefits: Benefits from Social Security, Medicare, and unemployment insurance
Means-Tested Transfers Transfers from Medicaid, SNAP, SSI, housing assistance programs, and other assistance programs
Federal Taxes Individual income taxes, payroll taxes, corporate income taxes, and excise taxes
Components of Household Income
![Page 8: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/8.jpg)
7CO N GR ES S IO N A L B UDGE T O F F IC E
Data SourcesIRS’s Statistics of Income and Census Bureau’s Current Population Survey
Unit of AnalysisHouseholds
Time Period1979 to 2013
Overview
![Page 9: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/9.jpg)
8CO N GR ES S IO N A L B UDGE T O F F IC E
Income Before Transfers and Taxes, 2013
![Page 10: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/10.jpg)
9CO N GR ES S IO N A L B UDGE T O F F IC E
Income Before Transfers and Taxes, 2013
![Page 11: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/11.jpg)
10CO N GR ES S IO N A L B UDGE T O F F IC E
Distribution of Income, 2013
![Page 12: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/12.jpg)
11CO N GR ES S IO N A L B UDGE T O F F IC E
Average Means-Tested Transfer Rates, 2013
![Page 13: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/13.jpg)
12CO N GR ES S IO N A L B UDGE T O F F IC E
Average Means-Tested Transfer Rates, 2013
* * * * * *
![Page 14: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/14.jpg)
13CO N GR ES S IO N A L B UDGE T O F F IC E
Distribution of Income, 2013
*
![Page 15: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/15.jpg)
14CO N GR ES S IO N A L B UDGE T O F F IC E
Average Federal Tax Rates, 2013
![Page 16: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/16.jpg)
15CO N GR ES S IO N A L B UDGE T O F F IC E
Average Federal Tax Rates, 2013
![Page 17: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/17.jpg)
16CO N GR ES S IO N A L B UDGE T O F F IC E
Average Federal Tax Rates, 2013
![Page 18: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/18.jpg)
17CO N GR ES S IO N A L B UDGE T O F F IC E
Average Federal Tax Rates, 2013
![Page 19: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/19.jpg)
18CO N GR ES S IO N A L B UDGE T O F F IC E
*
Distribution of Income, 2013
![Page 20: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/20.jpg)
19CO N GR ES S IO N A L B UDGE T O F F IC E
Income After Transfers and Taxes, 2013
![Page 21: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/21.jpg)
20CO N GR ES S IO N A L B UDGE T O F F IC E
Income After Transfers and Taxes, 2013
![Page 22: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/22.jpg)
21CO N GR ES S IO N A L B UDGE T O F F IC E
Trends,1979 to 2013
![Page 23: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/23.jpg)
22CO N GR ES S IO N A L B UDGE T O F F IC E
Cumulative Growth in Income Before Transfers and Taxes, 1979 to 2013
![Page 24: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/24.jpg)
23CO N GR ES S IO N A L B UDGE T O F F IC E
Cumulative Growth in Income Before Transfers and Taxes, 1979 to 2013
![Page 25: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/25.jpg)
24CO N GR ES S IO N A L B UDGE T O F F IC E
Gini Coefficients, 1979 to 2013
![Page 26: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/26.jpg)
25CO N GR ES S IO N A L B UDGE T O F F IC E
Gini Coefficients, 1979 to 2013
![Page 27: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/27.jpg)
26CO N GR ES S IO N A L B UDGE T O F F IC E
Average Means-Tested Transfer Rates,
1979 to 2013
![Page 28: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/28.jpg)
27CO N GR ES S IO N A L B UDGE T O F F IC E
Average Means-Tested Transfer Rates, 1979 to 2013
![Page 29: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/29.jpg)
28CO N GR ES S IO N A L B UDGE T O F F IC E
Average Means-Tested Transfer Rates, Lowest Quintile, 1979 to 2013
![Page 30: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/30.jpg)
29CO N GR ES S IO N A L B UDGE T O F F IC E
AverageFederal Tax Rates,
1979 to 2013
![Page 31: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/31.jpg)
30CO N GR ES S IO N A L B UDGE T O F F IC E
Average Federal Tax Rates, 1979 to 2013
![Page 32: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/32.jpg)
31CO N GR ES S IO N A L B UDGE T O F F IC E
Average Refundable Tax Credit Rates, 1979 to 2013
![Page 33: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/33.jpg)
32CO N GR ES S IO N A L B UDGE T O F F IC E
2013 Tax Law Changes
![Page 34: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/34.jpg)
33CO N GR ES S IO N A L B UDGE T O F F IC E
2013 Tax Law Changes
American Taxpayer Relief Act (2012)Top marginal tax rate increased from 35 percent to 39.6 percent; long-term capital gains rate increased from 15 percent to 20 percent
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act (2010)Temporary reduction in payroll tax rates (from 6.2 percent to 4.2 percent) expired at end of 2012
Affordable Care Act (2010)Additional Medicare payroll tax of 0.9 percentage points imposed for high-earning taxpayers; 3.8 percent surtax on net investment income imposed for high-income taxpayers
![Page 35: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/35.jpg)
34CO N GR ES S IO N A L B UDGE T O F F IC E
Cumulative Growth in Income After Transfers and Taxes, 1979 to 2013
![Page 36: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/36.jpg)
35CO N GR ES S IO N A L B UDGE T O F F IC E
Cumulative Growth in Income After Transfers and Taxes, 1979 to 2013
![Page 37: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/37.jpg)
36CO N GR ES S IO N A L B UDGE T O F F IC E
Gini Coefficients, 1979 to 2013
![Page 38: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/38.jpg)
37CO N GR ES S IO N A L B UDGE T O F F IC E
Gini Coefficients, 1979 to 2013
![Page 39: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/39.jpg)
38CO N GR ES S IO N A L B UDGE T O F F IC E
What Happened in 2014?
![Page 40: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/40.jpg)
39CO N GR ES S IO N A L B UDGE T O F F IC E
Medicaid ExpansionOutlays
Affordable Care Act, 2014
![Page 41: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/41.jpg)
40CO N GR ES S IO N A L B UDGE T O F F IC E
Medicaid ExpansionCost-sharing Reductions Outlays
Affordable Care Act, 2014
![Page 42: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/42.jpg)
41CO N GR ES S IO N A L B UDGE T O F F IC E
Medicaid ExpansionCost-sharing ReductionsPremium Tax Credits
Outlays
Affordable Care Act, 2014
![Page 43: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/43.jpg)
42CO N GR ES S IO N A L B UDGE T O F F IC E
Medicaid ExpansionCost-sharing ReductionsPremium Tax CreditsPremium Tax Credits
Revenues
Outlays
Affordable Care Act, 2014
![Page 44: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/44.jpg)
43CO N GR ES S IO N A L B UDGE T O F F IC E
Medicaid ExpansionCost-sharing ReductionsPremium Tax CreditsPremium Tax CreditsIndividual Mandate Revenues
Outlays
Affordable Care Act, 2014
![Page 45: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/45.jpg)
44CO N GR ES S IO N A L B UDGE T O F F IC E
Medicaid ExpansionCost-sharing ReductionsPremium Tax CreditsPremium Tax CreditsIndividual MandateHealth Insurance Excise Tax
Revenues
Outlays
Affordable Care Act, 2014
![Page 46: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/46.jpg)
45CO N GR ES S IO N A L B UDGE T O F F IC E
Medicaid Expansion (+)Cost-sharing Reductions (+)Premium Tax Credits (+)Individual Mandate (-)Health Insurance Excise Tax (-)
Revenues
Outlays
Affordable Care Act, 2014
![Page 47: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/47.jpg)
46CO N GR ES S IO N A L B UDGE T O F F IC E
Medicaid Expansion (+)Cost-sharing Reductions (+)Premium Tax Credits (+)Individual Mandate (-)Health Insurance Excise Tax (-)Net Investment Income Tax (-)Additional Medicare Tax (-)
Revenues(Enacted 2014)
Revenues(Enacted 2013)
Outlays
Affordable Care Act, 2014
![Page 48: Trends in the Distribution of Household Income](https://reader034.vdocuments.us/reader034/viewer/2022050613/5a64d44c7f8b9a88148b5727/html5/thumbnails/48.jpg)
47CO N GR ES S IO N A L B UDGE T O F F IC E
Medicaid Expansion (+)Cost-sharing Reductions (+)Premium Tax Credits (+)Individual Mandate (-)Health Insurance Excise Tax (-)Net Investment Income Tax (-)Additional Medicare Tax (-)Net Effect
38.43.0
14.71.78.6
22.56.9
$16.4(billion)
Affordable Care Act, 2014