# More on income and wealth

#### posted at 11:26 am on December 30, 2009 by King Banaian

After reading my post on wealth mobility and Dane Smith’s latest for lost tax revenues, University of St. Thomas economist John Spry writes to Dane and me about a new paper by Gerald Auten and Geoffrey Gee on income mobility. (The paper in the National Tax Journal, but the first link above is to an ungated copy without the tables. You can find the tables here.) Auten and Gee have some presentation slides as well if you want a lighter skim.

The importance of the study, John writes, is that by use of IRS records Auten and Gee can track the same individuals over time:

By tracking the same people over time it can answers questions like: how has income changed for people that were in a particular income quintile in 1996 by 2005 (adjusting for inflation)? This is a different question than comparing people in a particular income quintile in 1996 with the set of people in the same income quintile in 2005. Some of the same people will be in the same income quintile, but some will move up or down.

John suggests you look at Table 4 (scrolling the table link), which is also the basis for most of the presentations slides. It is a little too hard for me to format, but this should do:

Percent Change in:

1996 Income Mean Median
Quintile Income Income

Lowest 186.8 77.2

Second 60.4 36.9

Middle 40.0 24.4

Fourth 31.7 17.9

Highest 25.8 8.6

Tap 10% 26.6 0.3

Top 5% 27.8 -10.6

Top 1% 10.1 -30.9

All Income Groups 37.1 22.7

Their main conclusions (quoting from the introduction):

1. There was considerable income mobility of individuals in the U.S. economy over the 1996-2005 period. More than half of taxpayers (57.5 percent by one measure and 55 percent by another measure) moved to a different income quintile over this period. About half (56 percent by one measure and 42 percent by another) of those in the bottom income quintile in 1996 moved to a higher income group by 2005.
2. Median incomes of taxpayers in the sample increased by 24 percent after adjusting for inflation. The real incomes of two-thirds of all taxpayers increased over this period. Furthermore, the median incomes of those initially in the lowest income groups increased more in percentage terms than the median incomes of those in the higher income groups. In contrast, the real median incomes of taxpayers who were in the highest income groups in 1996 declined by 2005.
3. The composition of the very top income groups changed dramatically over time. Less than half (39 percent or 42 percent depending on the measure) of those in the top 1 percent in 1996 were still in the top 1 percent in 2005. Less than one-fourth of the individuals in the top 1/100th percent in 1996 remained in that group in 2005.
4. The degree of relative income mobility among income groups over the 1996-2005 period was very similar to that over the prior decade (1987-1996). To the extent that increasing income inequality widened income gaps, this was offset by increased absolute income mobility so that relative income mobility neither increased nor decreased over the past 20 years.
5. Upward and downward mobility is affected by many factors. Based on a regression analysis, we find that initial position in the income distribution and changes in marital status are among the more important factors associated with changing positions in the income distribution.

I’ll add in my defense that wealth distribution and income distribution are different, and I took Dane’s challenge to be about the former. Still, the Auten and Gee study is quite important insofar as it uses individual tax return data to trace the path of a person in 1996 to where their income goes over a decade.

I found this fact quite interesting: For the top 1/100th of 1% of the income distribution — the 11,700 wealthiest tax filers in 1996 — their 1996 income was \$11.6 million and their 2005 income was \$4.1 million. Not suffering at all, but still a fall in median income of near 65%.

(P.S. I’ll continue posting on this topic for a few more weeks at my blog; please stop in.)

#### Recently in the Green Room:

Uh, I know there’s another point to this article; but I’m left wondering only why you, or Dane Smith, or John Spry, or Gerald Auten, or Geoffrey Gee, or any other people have access to my tax records.

Can I call up the IRS to get yours?

Eyas on December 30, 2009 at 12:26 PM

This post has been promoted to HotAir.com.

Comments have been closed on this post but the discussion continues here.

Ed Morrissey on December 31, 2009 at 9:24 AM

HotAir — Politics, Culture, Media, 2017, Breaking News from a conservative viewpoint

## Should we really start spending over \$400M each just to launch military rockets?

Jun 22, 2017 8:01 PM
Top Pick

## Judge will decide on Dakota Access Pipeline in September as Army Corps continues new environmental review

Jun 22, 2017 7:21 PM
Top Pick

“The Corps is just starting to grapple with the issues the court has identified.”

## Pelosi to critics: Let’s face it, I’m an “astute leader” and “master legislator”

Jun 22, 2017 6:41 PM

“So you want me to sing my praises, is that what you’re saying?”

## Trump’s desire for more law enforcement is “surreal” on the Left

Jun 22, 2017 6:01 PM

Why would we possibly want that?

## Illinois man charged with threatening to kill the president

Jun 22, 2017 5:21 PM

“I mean he sold our country to The Russians.”

## Sure, let’s chat about Jared Kushner’s security clearance

Jun 22, 2017 4:41 PM

I could think of someone else you might want to ask about…

## Deja vu: Four tea-party senators say they can’t vote for new GOP health-care bill — for now

Jun 22, 2017 4:01 PM

Leverage.

## LA Times: The case for restricting ‘hate-speech’

Jun 22, 2017 3:21 PM

“You can ask a hundred people what hate speech is and you get a thousand different answers”

## Trump: I never made any recordings of Comey

Jun 22, 2017 2:01 PM

Bluff.

## Hackers stole private data from election databases

Jun 22, 2017 1:21 PM

“90,000 records stolen by Russian state actors contained drivers license numbers”

## McConnell releases “ObamaCare light” health-care bill amid rumors at least three Senate Republicans will oppose

Jun 22, 2017 12:41 PM

Terrific.

## Baltimore businesses sue the city over damage done in Freddie Gray riots

Jun 22, 2017 12:01 PM

Failure to protect the city

## Report: DNI, NSA chief told Mueller that Trump asked them to say publicly that there was no collusion with Russia

Jun 22, 2017 11:21 AM

Pressure?

## Turkey is trying to be the mediator between Arab states and Qatar

Jun 22, 2017 10:41 AM

Big man on the Middle Eastern campus

## Most Americans (on all sides) now agree bias infects the media

Jun 22, 2017 10:01 AM

Biased Americans see media as biased.

## Michael Moore loves everything about the Democratic Party except for everything

Jun 22, 2017 9:21 AM

Tough times down on the liberal ranch

## Will Nancy Pelosi survive this latest Dem disaster?

Jun 22, 2017 8:41 AM

Eat quick, before it’s gone.

## A five year ban on immigrant welfare is going to backfire, probably badly

Jun 22, 2017 8:01 AM

## NYT’s Brooks: Let’s face it, there’s really no evidence on this Russian collusion stuff and this isn’t Watergate

Jun 21, 2017 10:01 PM

“I’m bothered by the lack of emerging evidence…”

## FIrst look at the Senate health bill

Jun 21, 2017 9:21 PM

“the Senate bill would go farther than the House version in its approach to cutting Medicaid spending.”

## Report: Gingrich urging Trump to ban CNN from White House press briefings

Jun 21, 2017 8:41 PM

Divide and conquer?

## Rush: You know, many in the conservative movement think I’ve sold out

Jun 21, 2017 8:01 PM

Heh.

## Anthem pulls out of Obamacare market in two more states

Jun 21, 2017 7:21 PM

“If we do nothing, more companies will back out and more people will lose coverage.”

## Dem senator: There’s plenty of circumstantial evidence that Mike Flynn is now cooperating with the FBI

Jun 21, 2017 6:41 PM

Uh oh.

## Baltimore puzzled over why they aren’t part of new federal crime fighting program

Jun 21, 2017 6:01 PM

You know, I may have cracked the case for you, guys

## The Philando Castile shooting: Why was it reasonable for the cop to be nervous but not for Castile to be?

Jun 21, 2017 5:21 PM

Standards.

## After Georgia loss, some Democrats turn on Nancy Pelosi

Jun 21, 2017 4:41 PM

“They’re still running against her and still winning races.”

## Dem senator: Let’s face it, obsessing about Russia has become a distraction that’s hurting our party

Jun 21, 2017 4:01 PM

Priorities.

## Officer stabbed at Flint, MI airport, FBI investigating as possible terrorism (Update: Attacker identified)

Jun 21, 2017 3:21 PM

“…the suspect is from Quebec and has a Canadian passport.”

## When the Left lost their way on immigration

Jun 21, 2017 2:41 PM

It wasn’t all that long ago, really

## Ted Cruz, key conservative negotiator: I have no idea what’s in the Senate health-care bill

Jun 21, 2017 2:01 PM

Mysteries.

## Evergreen College President: Disruptive students will be given a stern warning

Jun 21, 2017 1:21 PM

“I personally watched some of these students go up to Chief Brown, right up to her face, and call her all kinds of names, cursing at her.”

## Did the Queen “nix” a Trump visit to London?

Jun 21, 2017 12:41 PM

More like wishful thinking on the American left

## Paying the last full measure of devotion on the USS Fitzgerald

Jun 21, 2017 12:01 PM

Sometimes it’s hard. This was the hardest part

## Did the polls get the Handel/Ossoff race wrong?

Jun 21, 2017 11:21 AM

Nah.

## Finishing most expensive House race ever, Ossoff calls for campaign finance reform

Jun 21, 2017 10:41 AM

Physician, heal thyself

## Terrorism fears already altering Americans’ lifestyle decisions

Jun 21, 2017 10:01 AM

Maybe we’ll stay home and watch.

## The EPA federal worker “buyout” grows increasingly outrageous

Jun 21, 2017 9:21 AM

Good lack of work if you can get it

## GOP takes 2 more special House races, meaning what?

Jun 21, 2017 8:41 AM

Two more demoralizing moral victories for Dems.

## Yes, the NRA (and all of us) should be speaking out on the Philando Castile shooting

Jun 21, 2017 8:01 AM

Not a murder, but nearly as awful