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Order Code RS2081 1
Updated September 7, 2007
CRS Report for Congress
The Distribution of Income
Brian W. Cashell
Specialist in Macroeconomic Policy
Government and Finance Division
Summary
Although not itself a subject of legislation, the shape of the U.S. income
distribution is a factor in a number of policy areas of congressional interest, including
taxes, welfare, Social Security, and the minimum wage. The Bureau of the Census
conducts an annual survey from which it derives estimates of the distribution of income
in the United States. This report presents summary estimates of the distribution of
household income for 2006. It will be updated periodically. For more information on
the distribution of income including changes over time, see CRS Report RL32639,
Inequality in the Distribution of Income: Trends and International Comparisons, by
Brian W. Cashell.
The Distribution of Household Income
The Bureau of the Census conducts an annual survey from which it derives estimates
of the distribution of household income. The Census Bureau's 'official' measure of
income is based on the concept of money income and includes earnings, Social Security,
interest, dividends, and other forms of social insurance. It excludes the value of non-
money benefits such as food stamps and housing subsidies. It does not include capital
gains, and it is pre-tax income.1
Table 1 shows the distribution of income in 2006, by quintile, using this official
measure of household income. Each quintile represents 20% of the total number of
households. In 2006, there were 116,011,000 households, so each quintile represents
23,202,200 households. The top 5% (the top 5,800,550 households) are also shown
independently, because they alone account for a significant share of household income.
The Census Bureau publishes these estimates by quintile to provide a concise
snapshot of the overall distribution of income. It should be noted that there is no official
1 The complete Census Bureau report on income is available on their website at
[http://www.census.gov/hhes/www/income/income.html].
Congressional Research Service The Library of Congress
Prepared for Members and Committees of Congress](ViewImageLocal?handle=hein.crs/crsmthabafy0001&div=1&collection=&method=preview&ext=.png&size=3)