Where did this division between the 1% and the 99% come from, anyway? Turns out it originates from our government itself. The Congressional Budget Office (CBO) is a governmental agency charged with providing "objective, nonpartisan, and timely" economic analyses to Congress. It is staffed primarily by economists and public policy analysts, about 75% of whom have advanced degrees in their fields. This and other information about the CBO can be found on its website at www.cbo.gov.

The CBO tracks a variety of economic trends over time and presents the data in tabulated and report format for anyone to ponder. You don't even have to be a citizen of the United States to have access to this vast collection of economic and social data. For the purposes of dividing household income and tax information into meaningful categories, the CBO divides all American households into quintiles, or fifths, and then further divides the top quintile (i.e. the top 20%) into the top 10%, the top 5% and, you guessed it, the top 1%.

In its 2010 collection of tables, located at http://www.cbo.gov/publications/collections/tax/2010/all_tables.pdf, the CBO presents a summary of Average Pretax Household Income from 1979 to 2007 in 2007 Dollars. While the average pretax household income for all American households went from $63,400 to $96,000 during this period, an increase of 51%, the average pretax household income for the top 1% of American households went from $550,000 to $1,873,000 during the same period, an increase of 240%. In other words, although everyone's income increased to some degree, the income of the top 1% increased much more steeply.

If your eyeballs are twitching from reading too many numbers, these graphs presented by Forbes columnist E.D. Kain in America's Vanishing Middle Class, and originally appearing in Dave Gilson and Carolyn Perot's article It's the Inequality, Stupid: Eleven charts that explain what's wrong with America in the March/April 2011 issue of Mother Jones, provide an elegant visual. Income trends for 80% of America's families are virtually flat. Even the top 20%, taken as a whole, shows only a modest increase, something most Americans can easily stomach... the potential for prosperity is, after all, one element of the American Dream. What's harder to stomach is the trendline for the top 1%, which is so out of balance with the rest that it skews the scale.



The graph on the right shows the same numbers in terms of shares of the pie... the top 1% got massively bigger pieces of the pie during this period, while the bottom 80% saw their slices decrease in size.

At the same time, the balance of the tax burden as a percentage of household income also shifted. The average tax burden for all American households went from 22% in 1979 to 20% in 2007, an overall decrease of 2%. Sounds great - all Americans are paying less in tax as a percentage of their household income. But the tax burden for the top 1% went from 37% to 30% during the same period, an overall decrease of 7%. In other words, the tax burden on the top 1% decreased three and a half times more steeply than the tax burden on the average Joe. Not only are the so-called super-rich taking a greater share of the pie, they're getting better at keeping every crumb they can. The average American household, on the other hand, continues to contribute its fair share of crumbs to the common good. That's what pisses people off.

The CBO's numbers don't distinguish between the 1% and the 99%. Does that mean the Occupy protesters should really be chanting "We are the 80%"? That just doesn't have the same ring to it... stay tuned.