January 29th, 2007 at 11:01 pm
Scott Hodge at the Tax Foundation has published a report that shows that families with children tend to be relatively “upper-class” today, when they were truly considered “middle-class” in 1960.
These demographic shifts have no doubt contributed to the perception of rising income inequality. When the so-called rich are increasingly couples with two incomes, they will naturally look wealthier than the vast number of single taxpayers who now populate the statistical middle.
As has been outlined in previous Tax Foundation studies, taxes are stressing these dual-earner families from all sides. Many of these families live in high-cost urban and suburban areas and have incomes commensurate with the cost of living. Because of the progressivity of the federal tax code, these couples end up facing the highest federal income tax rates even though they live distinctly “middle-class” lifestyles. (emphasis mine)
The report has a couple of interesting graphs and reads pretty easily. Check out the incomes of the quintiles, and if you thought you were middle-class, see if you actually are.
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