The following data represent the percentage of total adjusted gross income (AGI) earned and percentage of tax paid by various income classes. The top 1% represents the percentage of total AGI earned and tax paid by those whose income is higher than 99% of all earners. The bottom 50% represents the percentage of total AGI earned and tax paid by those whose income is in the bottom 50% of all income earners. For example, in 2006, 22.06% of all income earned in the United States was earned by those in the top 1% of all income earners, while 12.51% of all income earned in the United States was earned by those in the bottom 50% of income earners.

(a) Use the data to make an argument that adjusted gross incomes are diverging among Americans.
(b) Use the data to make an argument that, while incomes are diverging between the top 1% and bottom 50%, the total taxes paid as a share of income are also diverging.

Transcribed Image Text:

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Income Share of Top 1% of Earners 22.06 22.83 20.00 17.21 18.87 18.70 21.86 19.04 20.58 20.65 19.72 Income Share of Bottom 50% of Earners 12.51 12.26 12.75 11.88 11.74 11.55 11.10 11.49 11.27 11.28 11.59 Income Tax Share of Top 1% of Earners 39.89 40.41 38.02 36.34 37.38 35.06 38.09 37.80 39.48 39.04 37.32 Income Tax Share of Bottom 50% of Earners 2.99 2.89 2.70 2.46 2.36 2.89 2.78 2.78 2.75 2.83 3.04