Jimmy P. at the DNC— A common economic critique from liberals is that people are poorer today than they were in 2000. I have heard that statistic repeatedly here in Denver. (Dems pick that number because it was the peak of bubble boom.) But new IRS numbers show that isn't the case. A few factoids:
1) Adjusted gross income reported on tax returns in 2006, adjusted for inflation, averaged $58,029, up 1.2 percent from 2000.
2) Some 60 percent of the increase in total income went to those making more than $75,000, but less than $1 million a year.
3) Average income rose $2,291 in 2004 and $2,210 in 2005, and $1,369 in 2006—the slowdown because of the effect of inflation.
4) Salaries fell by almost 1 percent among taxpayers whose total income was $1 million or more.
Me: I am not surprised by these numbers. Although you almost never hear about it, incomes began growing strongly starting in 2003. (This is a big reason Bush got re-elected.) Here is what real disposable personal income did from the first quarter of 2003 through the first quarter of 2007: 1.7 percent, 5.0 percent, 6.3 percent, 1.7 percent, 3.7 percent, 2.4 percent, 2.9 percent, 7.5 percent, (-4.7 percent), 2.5 percent, (-1.3 percent), 7.5 percent, 5.1 percent, 1.3 percent, 2.3 percent, 5.8 percent, 4.4 percent. Then came the credit crunch and oil price spike. Again, it seems to me that when we keep the economy growing at a good clip, concerns about income inequality and wage stagnation fade. The big problem with the economy is not enough hypergrowth quarters of 5 percent or more.