Updated U.S. Congressional Budget Office Data Reveal Unprecedented Increase in Inequality

Abstract

The U.S. Congressional Budget Office recently updated its authoritative data series on household incomes, 1979–2005. The new data reveal a sharp increase in income inequality over the past few years. The increase in income inequality (both pre- and post-tax), as measured by the change in the shares of income going to different income classes, was greater from 2003 to 2005 than over any other two-year period covered by the CBO data.