New policies implemented by the federal government affected transfers and taxes in 2021. The policies largely benefited lower- and middle-income households. But income inequality still increased, mainly because of realized capital gains.
Explaining Analytical Methods
- Blog Post
CBO published initial results of the distribution of income by race and ethnicity in "AEA Papers and Proceedings."
- Report
CBO focused on households’ consumption of a bundle of typical goods and services from 2019 to compare purchasing power in 2019 with that in 2023. On average, purchasing power increased, but the effects of inflation varied by income group.
- Report
In 2020, the coronavirus pandemic and the ensuing federal response had significant effects on the distribution of household income. Income inequality before transfers and taxes increased, but inequality after transfers and taxes decreased.
- Report
CBO examines how inflation has affected households at different income levels and compares inflation since 2019 with the growth in household income over the same period.
- Report
CBO examined how the benefits from major tax expenditures in the individual income tax and payroll tax systems were distributed among households in different income groups in 2019.
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In 2018, average household income after accounting for means-tested transfers and federal taxes was $37,700 among households in the lowest quintile and $243,900 among households in the highest quintile.
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In 2017, average household income before accounting for means-tested transfers and federal taxes was $21,300 for the lowest quintile and $309,400 for the highest quintile. After transfers and taxes, those averages were $35,900 and $229,700.
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This report projects the distributions of household income, means-tested transfers, and federal taxes under current law in 2021 and compares them with the actual distributions in 2016.