![]() Less than 4 percent of means-tested transfers went to households in the highest quintile, which amounted to less than one-half of one percent of income for those households. Over 50 percent of means-tested transfers went to households in the lowest income quintile, which amounted to 72 percent of income before transfers and taxes for those households. In fact, those transfers went overwhelmingly to low-income households in 2016. ![]() ![]() Not all households receive means-tested transfers. Decreased income among households in the top 1 percent by $600,000 (or more than 33 percent), on average, to $1.2 million.Decreased income among households in the highest quintile by $76,000 (or more than 25 percent), on average, to $215,000, and.Increased income among households in the lowest quintile by $14,000 (or more than 65 percent), on average, to $35,000,.In 2016, according to CBO’s estimates, those transfers and taxes: Because of the progressive structure of those systems, the distribution of income after transfers and taxes is more even than the distribution of income before transfers and taxes. That is, low-income households receive a larger share of their income as means-tested transfers than do high-income households, and high-income households pay a larger share of their income in federal taxes than do low-income households. Means-tested transfers and federal taxes are both progressive. How Did Means-Tested Transfers and Federal Taxes Affect the Distribution of Income in 2016? Those amounts include social insurance benefits (such as benefits from Social Security and Medicare). Average income among households in the top 1 percent was about $1.8 million.Average income among households in the highest quintile-that is, the top 20 percent-was about $291,000 and.Average income among households in the lowest quintile (or fifth) of the income distribution was about $21,000.According to the agency’s estimates, in that year: What Was the Distribution of Income in 2016 Before Taxes and Transfer Payments?įirst, CBO analyzed household income excluding the effects of federal taxes and means-tested transfers (which include benefits from Medicaid, the Supplemental Nutrition Assistance Program, and Supplemental Security Income). This report focuses on 2016, the most recent year for which data exist in sufficient detail. For more than 30 years, CBO has analyzed the distribution of household income.
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