This graph illustrates an article by David Leonhardt (NY Times) on the US income distribution.
It shows how the income distribution has changed between 1980 and 2014.
In 1980, there was a catch-up effect for low incomes. Their growth rate was higher than the average and higher than high incomes. For the lowest 20%, the 1980 income growth was higher than the average (2.5% inflation adjusted growth)
In 2014, every percentile has an income growth that is lower than percentiles higher on the distribution. There is no more catch-up but divergence.
For the highest 20%, the 2014 income growth was higher than the average (1.4% inflation adjusted growth).
The proposal made by Donald Trump and the Republicans to lower tax rates would accentuate the divergence of the income distribution. It would be negative for the economy.
« Most Americans would look at these charts and conclude that inequality is out of control. The president, on the other hand, seems to think that inequality isn’t big enough. »
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