ABSTRACT
The dramatic rise in income inequality in the United States is well documented. Incomes exclude government transfers and non-taxable fringe benefits. Incomes are deflated using the Consumer Price Index. Interestingly, the income composition pattern at the very top has changed considerably over the century. The share of wage and salary income has increased sharply from the 1920s to the present, and especially since the 1970s. In the United States, and most other countries, household income surveys virtually did not exist prior to 1960. Combining these data with population census data and aggregate income sources, one can estimate the share of total personal income accruing to various upper-income groups, such as the top 10 percent or top 1 percent. The evidence suggests that top incomes earners today are not "rentiers" deriving their incomes from past wealth but rather are "working rich," highly paid employees or new entrepreneurs who have not yet accumulated fortunes comparable to those accumulated during the Gilded Age.
