New York City Mayor Bill de Blasio likes to proclaim as pithy a distillation of left-leaning economics as one could want: "There's plenty of money in this country," he says. "It's just in the wrong hands. We Democrats have to fix that."
This incorrect distribution of abundant loot — or "economic inequality" in less blunt language — is sure to be a prominent issue in the 2020 presidential campaign, a major theme of the eventual Democratic nominee, even if, as seems likely, that isn't de Blasio.
But one thing that may not be so plentiful as that debate unfolds is precision in describing the level of inequality in America, or its trends over recent decades, or the degree to which government policies already alter it.
So if there remain voters in America who care about such things, they might find it useful to secure a baseline of facts concerning income in America. Fortunately, the trustworthy Congressional Budget Office is out this month with its latest report on "The Distribution of Household Income," based on 2016 data.
Indisputably, the existence of sharp inequality is one of the facts to be faced. CBO reports that in 2016 average annual income among the least prosperous "quintile" (or 20%) of American households was about $21,000. Among the richest 20%, average income was $1.8 million.
Averages, though, can be misleading, especially at the top, where the kingly cash flows of the mega-rich distort the picture. Resentment of the very largest incomes is part of the discontent inequality fuels, of course — and accumulated wealth is a distinct issue this CBO report doesn't address.
But to get a more realistic picture of how closer-to-normal people live, it might be more helpful to note that the CBO's data shows, among three-person households, that the top 1% of incomes begin at about $670,000, while the bottom 20% includes all households taking in less than about $40,000 a year.
These incomes include private earnings along with "social insurance benefits" — mainly Social Security and Medicare. What they don't account for are taxes, including refundable tax credits, or means-tested public benefits like Medicaid and food stamps and cash assistance.