New Study Using IRS Tax Data Shows Rich Are Staying Richer, Poor Poorer

A groundbreaking new study concludes that the rich became permanently richer and the poor permanently poorer from 1987 to 2009. Five economists, including one from the U.S. Treasury and two from the Federal Reserve, used data from nearly 34,000 working age households’ 1040s, W-2s and Social Security records to tease out how much of the much discussed rise in income inequality in the U.S. might simply reflect more volatility in earnings, with families having good and bad years. Their unhappy conclusion: almost all of the rise in inequality is life-long.

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