EPI's Jared Bernstein has an excellent analysis of the most recent CBO income distribution figures on TPM Cafe.

Over those two years, the growth of inequality transferred $400 billion dollars from the bottom 95% to the top 5%. That is, had the income distribution remained as it was in 2003, the income of each of the 109 million households in the bottom 95% would have been $3,660 higher in 2005.

His whole post is well worth a read.

In addition to the report I wrote about earlier, the CBO has made the data underlying that report available in an Excel spreadsheet.

Like Republicans and tax cuts, I just can't resist graphing income and tax data. So, here you go. This graph represents the shares of after-tax income for the lowest 4 quintiles and the top quintile. I knew the 2001-2003 Bush tax cuts were skewed toward the rich, but this graph really puts things into perspective.

(Click on image to enlarge)

New figures released by the CBO indicate that overall effective federal tax rates have increased from 20.1% in 2004 to 20.5 in 2005%. Through a process known as "real bracket creep," Americans are paying higher tax rates without changes in the tax code. As incomes grow faster than inflation, taxpayers will find themselves paying taxes at higher marginal rates.

But the real story here is that this increase in effective tax rates is due primarily to increases in income inequality. As overall effective tax rates increased from 2004 to 2005 so did the share of income that goes to the top quintile of the income distribution. Meanwhile, shares going to the bottom four quintiles declined.

And an interesting twist to this report, the overall effective tax rate would have been higher in 2005 except for the fact that income from non-wage sources grew faster than than wage income. Because capital gains tax rates are lower than wage income tax rates, this boost in income actually dragged down the increase in effective federal tax rates.

Via (who else but) Inclusionist, I checked out Chapter 6 of Prof. George Lakoff's new book on progressive strategy. Take a look at this paragraph on economic equality:

For progressives, deservedness is understood through the lens of nurturance, which says that someone in need deserves assistance. This satisfies the "human dignity principle," making sure no one falls too far behind. It also fulfills the "common good principle," since the needs of the commons are counted as valid needs that merit attention, besides just the needs of an individual.

By Lakoff's definition, America is not a progressive nation. I've never seen any survey of public opinion showing majority support for this worldview. Lakoff does not provide that evidence, either.

But of course, America is a progressive nation. We have a robust welfare and regulatory state, despite its shortcomings. So what gives?

Lakoff's wrong. His values are not the entirety of progressive values. They are a subset, subscribed to mostly by the poor and intellectuals, and to some extent by the nebulous middle class. Everybody believes in the moral imperative of meeting people's basic needs in an affluent society. But "needs" are defined down to mean the bare minimum of subsistence. That doesn't scale up to a truly equitable society.

Basically, I'm just not convinced that most Americans are empathic altruists or communitarians who think "we're all in this together" when it comes to the economy. We're individualists, concerned generally with the good of ourselves, our families and our friends. I don't think we empathize that well with people we perceive as different. And I don't think we really care how other people are doing, as long as we're getting ours. Check out the work of Matthew Nisbit and Ruy Texiera for more on this point.

That doesn't mean we always hate government or don't care about vast inequalities. I think Americans still believe that government can be a means towards achieving aspirational ends and that government can ensure that opportunity is widely available and that prosperity benefits everybody. Empathy and community, however, are not at the root of this vision of the American dream. Individualism is.