Archive for the 'Congressional Budget Office' Category

Historical Tax Rates by Income Group: Part 2

Published by Catherine on March 2, 2008 in Congressional Budget Office, Line Graph and Tax Rates. Closed

In an earlier post, I had a graph showing the Historical Tax Rates by Income Group using data from Pitketty & Saez. Here is another graph (found on Greg Mankiw’s Blog) which shows historical tax rates by income group but this time the data is from the Congressional Budget Office.

CBO total effective tax rate

Addendum 3/3/08
The large difference between the two graphs is due to the treatment of payroll taxes paid by employers and the corporate income tax. The Pitketty & Saez data assumes these taxes are actually paid by employees and stockholders but the CBO data in the above graph does not include them.

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Comparing Income Series

Published by Catherine on September 2, 2006 in Bureau of Labor Statistics, Congressional Budget Office, GDP, Income - Average, Median, Line Graph, Pitketty & Saez, US Census and United States. 4 Comments

I have been working on a graph to show how different US income data series compare to one another. I have plotted 8 income series from 4 different sources, including average and median income. Also I used the CPI-U to adjust each series to 2005 dollars instead of 2002$, 2003$ and 2004$.

Click on the graph to take a closer look:
magnafing glass

Data sources for the income series can be found at:

Some of the differences in these series is due to the unit of measurement:

  1. Family is defined as two or more related people living together
  2. Households include families, singles, non-related people living together.
  3. Tax units are singles, married filling jointly, head of household.

Also over time, family and household sizes have been getting smaller.

If you see a problem with the graph you can post a comment. I plan to refine this graph over the next few weeks.

Addendum:
10/7/2006 Reformatted some of the labels and fixed the y-axis label

[tags]average income, median income, US income, US income distribution[/tags]

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Review of CBO Methodology

Published by Catherine on January 30, 2006 in Congressional Budget Office and Data Methodology. Closed

If after looking at the graphs I created (based the income data from the Congressional Budget Office) you decide you want to learn more about how the CBO calculates their numbers. You can take a look at an analysis of their report.

The following outlines the components of income included in the CBO’s analysis:

* Cash income, taxable and tax exempt, including wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, cash transfer payments, and retirement benefits
* Business taxes, including corporate income taxes, the employer’s share of Social Security, Medicare, and federal unemployment insurance payroll taxes (imputed to households, as per the assumptions on tax incidence above)
* Employees contributions to 401(k) retirement plans
* All in-kind benefits (Medicare, Medicaid, employer-paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assistance)

Note that CBO:

* uses the Census Bureau’s fungible value measure for government in-kind transfers;
* does not adjust capital gains for inflation, and does not include unrealized capital gains or imputed rents on owner-occupied housing (see [1], pp. 23–24); and,
* double counts retirement income (see [1], p. 21).

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Total Income of Top, Middle, & Bottom

Published by Catherine on January 30, 2006 in Congressional Budget Office, Income - Total, Aggregate, Line Graph and United States. 1 Comment

Income by Custom Percentiles

Another post on the CBO report.
I combined the percentile income data for the past 20 years into three groups: bottom 60%, 60-95%, and top 5%.In 2002, if you lived in a household with a total income of:

    less than $39,800 per year then you were in the bottom 60%
    between $39,800 and $105,300 then you were in the 60-95% range
    greater than $105,300 then you were in the top 5%

The first thing I noticed was that in 1997, 1998, 1999, 2000 the total combined income of the top 5% was greater than the combined income of the bottom 60%.

The second thing I saw was the same income drop in 2000 from my earlier graphs (see: Changes in U.S. Total Income and Changes in Household Income by Quintiles). However, you can see that this dramatic decline is concentrated in the top 5%.

But looking at the graph below, it is in fact the top 1% that had the big decline, all of the previous graphs rolled up this change into the top 20% and top 5%. It even effected the total income. So in fact it wasn’t the top 20% that was hit hard by the stock market crash but the top 1%.
CBOIncomebyPercentile(top_one)

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Changes in U.S. Total Income

Published by Catherine on January 25, 2006 in Congressional Budget Office, Income - Average, Median, Income - Total, Aggregate, Line Graph and United States. 3 Comments

Total Income Graph

The Congressional Budget Office (CBO) has a report that looks at incomes across all households. Above, I have ploted the total income for the United States.

Below, I have ploted the average income for the United States. In both cases income drops after 2000.

Average Income Graph

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