Obama's Deceit Extends to Income Equality

The Congressional Budget Office's new report is especially timely in light of the President's rant last week about "income inequality".  As you can see from the table below, if you're talking about market income -- that which you actually earn -- the distribution is highly unequal. The highest household quintile earns almost 30 times what the bottom  one does (household income  can be very mislead itself because the household composition is very different between the upper and lower quintiles). But after tax and government payments? That ratio drops to less then 6x.

What's even more remarkable is to examine the incentives for working. Those in the second quintile earn on average $46,700 more than those in the lowest quintile. Yet, after taxes and transfers those people are only $26,600 better off -- because they actually pay some tax, and they lose a lot of their government transfer payments. That's an effective marginal tax rate of 43% . Do you think the average middle class family really understands that the federal government is imposing a 43% tax on their work? I'd say about as well as they understood that they would be able to keep their health plan under Obamacare.