Incomes 2001 – 2006

Jordan highlights some census data showing how incomes have risen between the 2001 and 2006 censuses with the median income up 32%.

Now of course gross incomes have actually risen. There has been a reasonable level of economic growth.

But first of all one should note (which Jordan did do) that some of this is inflation, which was 13% over that period. So the real increase over five years was 16.8% or 3.4% a year. So in real terms median income went from $18,500 to $21,600 or a $3,100 increase.

Now out of interest what happened to personal income tax over that time? Oh it increased by 42.3% or $7.2 billion (total direct taxation went up 54%). Anyway personal taxation alone on average (and yes median is different but no data for that) went up by $2,300 per adult. Now that does not take account of inflation’s effect on taxation but likewise I have also not covered the fact people have been spending more than they earn, which would counter that somewhat

So yes incomes have gone up. That happens when you have economic growth. But both inflation and taxes have eaten up a reasonable chunk of that increase, so that the net real increase in income is not that huge for a five year period.

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