Reason for shift of the U.S. income distribution in last two decades.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 18, Problem 1P

To determine

Reason for shift of the U.S. income distribution in last two decades.

Expert Solution & Answer

Explanation of Solution

In recent decades(from 1980s onward), the share of income earning by the top fifth has increased, and the share earnings by the bottom fifth has declined. The richest fifth’s share of income increased from 43.7 percent in 19900= to 51.1 percent in 2014. The foremost contributor to the larger share of income earning by the highest group has been the growth of two-earner households in that top group.

Note that in the top quantile, almost three out of the four households have two or more than two working. A major contributor to the smallest share earned by the lowest group has been the growth of single parent household in the bottom group.

Because of significant reduction in the marginal tax rates (in 1990 and 1996), high-income people had no incentive to engage in avoidance of tax, so their reported income increased. This boosted the share of reported earned income by the richest 5 percent of the households.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

What do we mean by market income? Example...

8. Includes all income earned: wages, profits, rent, and profit income within an Economy. Question 8 options: Trade Balance Net Income Gross Domestic Product National Income

A1 The income cycle flow is designed to show the flow of economic activity in a country. So the income cycle streams are the income streams that exist between existing economic sectors. Definition and concept of state income balance

Answer 2

Question

Chapter 18, Problem 1P

To determine

Reason for shift of the U.S. income distribution in last two decades.

Expert Solution & Answer

Explanation of Solution

In recent decades(from 1980s onward), the share of income earning by the top fifth has increased, and the share earnings by the bottom fifth has declined. The richest fifth’s share of income increased from 43.7 percent in 19900= to 51.1 percent in 2014. The foremost contributor to the larger share of income earning by the highest group has been the growth of two-earner households in that top group.

Note that in the top quantile, almost three out of the four households have two or more than two working. A major contributor to the smallest share earned by the lowest group has been the growth of single parent household in the bottom group.

Because of significant reduction in the marginal tax rates (in 1990 and 1996), high-income people had no incentive to engage in avoidance of tax, so their reported income increased. This boosted the share of reported earned income by the richest 5 percent of the households.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 18, Problem 1P

To determine

Reason for shift of the U.S. income distribution in last two decades.

Expert Solution & Answer

Explanation of Solution

In recent decades(from 1980s onward), the share of income earning by the top fifth has increased, and the share earnings by the bottom fifth has declined. The richest fifth’s share of income increased from 43.7 percent in 19900= to 51.1 percent in 2014. The foremost contributor to the larger share of income earning by the highest group has been the growth of two-earner households in that top group.

Note that in the top quantile, almost three out of the four households have two or more than two working. A major contributor to the smallest share earned by the lowest group has been the growth of single parent household in the bottom group.

Because of significant reduction in the marginal tax rates (in 1990 and 1996), high-income people had no incentive to engage in avoidance of tax, so their reported income increased. This boosted the share of reported earned income by the richest 5 percent of the households.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 18, Problem 1P

To determine

Reason for shift of the U.S. income distribution in last two decades.

Expert Solution & Answer

Explanation of Solution

In recent decades(from 1980s onward), the share of income earning by the top fifth has increased, and the share earnings by the bottom fifth has declined. The richest fifth’s share of income increased from 43.7 percent in 19900= to 51.1 percent in 2014. The foremost contributor to the larger share of income earning by the highest group has been the growth of two-earner households in that top group.

Note that in the top quantile, almost three out of the four households have two or more than two working. A major contributor to the smallest share earned by the lowest group has been the growth of single parent household in the bottom group.

Because of significant reduction in the marginal tax rates (in 1990 and 1996), high-income people had no incentive to engage in avoidance of tax, so their reported income increased. This boosted the share of reported earned income by the richest 5 percent of the households.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 18, Problem 1P

To determine

Reason for shift of the U.S. income distribution in last two decades.

Expert Solution & Answer

Explanation of Solution

In recent decades(from 1980s onward), the share of income earning by the top fifth has increased, and the share earnings by the bottom fifth has declined. The richest fifth’s share of income increased from 43.7 percent in 19900= to 51.1 percent in 2014. The foremost contributor to the larger share of income earning by the highest group has been the growth of two-earner households in that top group.

Note that in the top quantile, almost three out of the four households have two or more than two working. A major contributor to the smallest share earned by the lowest group has been the growth of single parent household in the bottom group.

Because of significant reduction in the marginal tax rates (in 1990 and 1996), high-income people had no incentive to engage in avoidance of tax, so their reported income increased. This boosted the share of reported earned income by the richest 5 percent of the households.

Answer 6

Chapter 18, Problem 1P

To determine

Reason for shift of the U.S. income distribution in last two decades.

Expert Solution & Answer

Explanation of Solution

In recent decades(from 1980s onward), the share of income earning by the top fifth has increased, and the share earnings by the bottom fifth has declined. The richest fifth’s share of income increased from 43.7 percent in 19900= to 51.1 percent in 2014. The foremost contributor to the larger share of income earning by the highest group has been the growth of two-earner households in that top group.

Note that in the top quantile, almost three out of the four households have two or more than two working. A major contributor to the smallest share earned by the lowest group has been the growth of single parent household in the bottom group.

Because of significant reduction in the marginal tax rates (in 1990 and 1996), high-income people had no incentive to engage in avoidance of tax, so their reported income increased. This boosted the share of reported earned income by the richest 5 percent of the households.

Answer 7

Chapter 18, Problem 1P

To determine

Reason for shift of the U.S. income distribution in last two decades.

Answer 8

Expert Solution & Answer

Explanation of Solution

In recent decades(from 1980s onward), the share of income earning by the top fifth has increased, and the share earnings by the bottom fifth has declined. The richest fifth’s share of income increased from 43.7 percent in 19900= to 51.1 percent in 2014. The foremost contributor to the larger share of income earning by the highest group has been the growth of two-earner households in that top group.

Note that in the top quantile, almost three out of the four households have two or more than two working. A major contributor to the smallest share earned by the lowest group has been the growth of single parent household in the bottom group.

Because of significant reduction in the marginal tax rates (in 1990 and 1996), high-income people had no incentive to engage in avoidance of tax, so their reported income increased. This boosted the share of reported earned income by the richest 5 percent of the households.