U.S. Income Gap Widening

In 2000, the top 1 percent of American taxpayers had $862,700 each after taxes, on average, more than triple the $286,300 they had, adjusted for inflation, in 1979.

The bottom 40 percent in 2000 had $21,118 each, up 13 percent from their $18,695 average in 1979.

Mr. Shapiro also analyzed the budget office data in tandem with a recently updated study on income by the National Bureau of Economic Research, a nonpartisan, nonprofit research organization in Cambridge, Mass. The bureau study found that in 2000, the top 1 percent income group had the largest share of before-tax income for any year since 1929.

Mr. Shapiro said that findings from both studies suggested that in 2000, the top 1 percent had the largest share of the nation's total after-tax income since at least 1936 and probably since 1929. Mr. Shapiro emphasized that his combined analysis accounted for the fact that his study used after-tax incomes while the bureau's study used pretax incomes.

Both low- and middle-income people shared in the boom of the 1990's, while in the 1980's the bottom fifth experienced a decline in after-tax income, according to the budget office data analyzed by Mr. Shapiro and Robert Greenstein, director for the Center on Budget and Policy Priorities.

The middle fifth had an average after-tax income of $41,900 in 2000, a rise of 15 percent both since 1979 and 1997, indicating a long period of no real economic gains for this group.

"You do have gains across the spectrum from 1997 to 2000," Mr. Shapiro said, "but they are much more dramatic at the top."

The center's analysis said the highest income Americans had grown richer from 1979 to 2000 both from gains in income because of economic prosperity and from tax cuts. Huge gains in executive pay were a significant factor, Mr. Shapiro said.