Growls

The Tax Foundation released one of their periodic ‘fiscal facts’ dated January 29, 2007 , which reported that an upcoming U.S. House Ways and Means Committee hearing would focus “on the economic challenges facing the ‘middle-class’” so the committee could “investigate the notion that today’s families are experiencing economic pressures greater than those faced by their parents’ or grandparents’ generation.”

The Tax Foundation continued:

“To understand this issue, however, Members first need to understand how different today's families are from those of 40 or 50 years ago and how demographic changes have affected the notions of who is "middle-class" and who is upper-income in America.

“If by "middle class" we mean intact families with children (the stereotypical family of four), then these families no longer comprise the majority of the statistical middle 20 percent of taxpayers. The majority of families with children now populate the wealthiest 40 percent of Americans, in part because of the growth in dual-earner households. So if Ways and Means members focus too much on the "median family" or "median taxpayers" they will not be accurately portraying the economic status of today's working families.”

Using data from IRS’ public use files, the Tax Foundation provides charts, which graphically show that “in 1960, the majority of statistical ‘middle class’ were married couples and families with children.” By 2002, “(m)ore than two-thirds of modern middle-income taxpayers are single, or single-headed households, while 36 percent are married . . . The majority of couples with children are now clustered in the top two quintiles.”

Perhaps most importantly, the Tax Foundation says:

“These demographic shifts have no doubt contributed to the perception of rising income inequality. When the so-called rich are increasingly couples with two incomes, they will naturally look wealthier than the vast number of single taxpayers who now populate the statistical middle.”