American income growth over past 25 years

It has become an oft-repeated statement that American middle class household income stayed flat over the past quarter century, and that income gains have been accruing only to the wealthy.

That statement has turned out to be false:
New Evidence on Taxes and Income
(Arthur B. Laffer, Stephen Moore)

The new Census Bureau data on income and poverty reveal that many of the economic trends in this country are a lot more favorable than America's detractors seems to think. In 2007, overall real median family income increased to $50,233, up $600 from 2006. The real median income for intact families -- mother and father in the home -- rose to $78,000, an all-time high.


Income gains over the last 30 years have been systematically understated due to several factors. These include:
  • Fall in people per household. [...]
  • Earned income tax credit effect. [...]
  • Income mobility. [...]
Thanks to Rok Spruk for linking to this.


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