Poor Live Better Now

Arthur Laffer and Stephen Moore in the Journal:

When all sources of income are included — wages, salaries, realized capital gains, dividends, business income and government benefits — and taxes paid are deducted, households in the lowest income quintile saw a roughly 25% increase in their living standards from 1983 to 2005. (See chart nearby; the data is from the Congressional Budget Office’s “Comprehensive Household Income.”) This fact alone refutes the notion that the poor are getting poorer. They are not.

Laffer and Moore point out that we’ve been underestimating gains to the poor due to the decline in people per household, and the increase in the EITC, which led more poor people to file tax returns and therefore show up in certain sets of data.

And the new WSJ site looks terrific.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center