Income Distribution

The following chart is one way to visualize the income distribution in the United States. The x-axis is the percentile of income, the y-axis is the income level. You can use the dropdown to switch between viewing those who file as single and those who file jointly. (The data do not yet include those filing as Head of Household.) We assume that every filer takes the standard deduction.[1]

Filing Status:

Year:

Bracket Start ($)
Bracket End ($)
Bracket Rate
The Gini Coefficient[2] of the above income distribution is:
The additional tax revenue raised per year by these policies is approximately: [3]

Note that the current distribution follows a "hockey-stick" shape, where the graph is mostly flat and then skyrockets upward at the right end of the distribution. This indicates that those at the very top of the income distribution earn significantly more than even those in the upper middle class.

This gets into fundamental questions of fairness. I believe that, as it currently stands, the distribution of income is unfair. One way to address this would be to increase the bargaining power of workers in the lower and middle classes. However, this project focuses on an alternative solution of increasing taxes on the highest earners.

Future work:

These data were gathered from the incredible IPUMS CPS project. Many thanks to all those who work to make these available. This currently uses the ASEC 2020 data, using the INCTOT field to get individual total income and filtering down to only single filers.

Citation:

IPUMS-CPS, University of Minnesota, www.ipums.org

Sarah Flood, Miriam King, Renae Rodgers, Steven Ruggles and J. Robert Warren. Integrated Public Use Microdata Series, Current Population Survey: Version 8.0 [dataset]. Minneapolis, MN: IPUMS, 2020. https://doi.org/10.18128/D030.V8.0

If you have ideas for how to improve this project, please send them my way! My email address is finch.parker at gmail.

[1] This is one of many factors that make the income distribution and derived statistics (such as the Gini coefficient and the amount of revenue raised) rough estimates. By assuming everyone takes the standard deduction, we are overestimating the taxes paid by those at the upper end of the income distribution. Future work is needed to get a more accurate estimate of actual taxes paid at different income levels. ↩

[2] The Gini Coefficient is a measure of inequality in a distribution. Reducing a concept like inequality to a single number can be helpful for comparisons. However, a single number does not have the same descriptive power as a graph — in this, as in most cases, the picture gives a more complete story. ↩

[3] The additional revenue is calculated by taking a ratio of the income from the proposed tax rate to the income from the actual tax rate, and then scaling that to the amount of revenue from income taxes. This does not consider income from those filing singly and those filing jointly separately, it assumes that any changes in tax rate to one will effectively be applied across the entire tax base. There is future work needed to distinguish these two, or to clarify on the page how the numbers are calculated. ↩