The share of income earned by the top 1 percent grew in 2014 despite new Obama-era taxes on high income earners taking full effect, according to newly released tax data.
The share of total U.S. income earned by the top 1 percent increased from 20.1 percent in 2013 to 21.2 percent in 2014, Berkeley economist Emmanuel Saez reported Monday.
The top 10 percent share also rose, from 48.9 percent of all income in 2013 to 49.9 percent in 2014.
Those were the highest shares claimed by the top 10 percent since 1917, setting aside the year 2012, when earners shifted significant amounts of income from the future to the present in order to avoid new taxes on high incomes resulting from the expiration of some Bush-era tax cuts.
The Internal Revenue Service data released Monday by Saez includes detail on the top 1 percent of income earners not available in the income and inequality data regularly released by government agencies. The income data published by Saez and his co-author, the prominent Paris School of Economics professor and author Thomas Piketty, are regularly cited by lawmakers and have increased awareness about the recent rise of top incomes.
The numbers released Monday indicate that top incomes continued to grow faster than other incomes even after the imposition of the new income taxes, even with the strongest inflation-adjusted income growth for the bottom 99 percent since 1999.
Top 1 percent incomes grew by 10.8 percent from 2013 to 2014, according to Saez. The bottom 99 percent incomes grew by 3.3 percent.
In a post for the Washington Center for Equitable Growth, Saez wrote that the new data “suggests that the higher tax rates starting in 2013, while not negligible, will not be sufficient by themselves to curb the enormous increase in pre-tax income concentration that has taken place in the United States since the 1970s.”
Tax policy changed significant in early 2013, when the Bush tax cuts were allowed to expired for incomes over $400,000 for individuals or $450,000 for couples — a top domestic priority for President Obama. The top marginal income tax rate rose from 35 percent to 39.6 percent, and tax rates on capital gains and dividends also increased.
The average incomes of the top 1 percent were $1.26 million, according to Saez. The average for the top 10 percent was just below $300,000.
Saez’s data shows that over the course of the recovery from the recession that ended in 2009, the top 1 percent of families earned 58 percent of total real income growth per family.
