*As budget and economic policy debates rage on Capitol Hill in Washington, D.C., the great untold story in America may be the undermining of the American middle class – both white and Black – as the wealthy take an ever growing share of the nation’s income and wealth.
Here are the latest figures released this week by the Internal Revenue Service: In 1988, the income of the average American taxpayer (adjusted for inflation) was $33,400. In 2008, the average taxpayer income was still around $33,000. In other words, the average taxpayer was making slightly more 20 years ago that he (or she) is today. (Note: These figures are for individual taxpayers. Family and household income will be larger.)
However, the people in the middle were stagnating financially; the IRS data show that the wealthiest 1 percent of Americans – those making more than $380,000 a year – saw their incomes grow by an astounding 33 percent from 1988 to 2008 (the latest year for which complete figures are available).
Meanwhile, a recently released study by the liberal-leaning Economic Policy Institute (EPI) found that the richest 1 percent of U.S. households have now amassed a net worth which is 225 times greater than that of the average American household (2009 figures). This is up from the previous record of 190 times greater set in 2004.
As for the poor, they are not even in the picture. The EPI study found that the poorest American households have had a negative net worth since 1962. This means their debts and other liabilities are greater than all their assets. And the situation for the poor is getting worse. In 2009, they owed nearly twice as much as they did in 2007.