The well-off are doing very well in Washington, according to a new study from the state Office of Financial Management, which studied the distribution of income, wealth and taxes across Washington households from 2005 to 2009. In 2009, 54.8 percent of total income went to the top 20 percent of households, while 1.6 percent went to the bottom 20 percent. In 2005, the top 20 received 57.4 percent of total Washington income, while the bottom 20 got 1.5 percent of income.
More than half the total wealth in the state was held by the top 5 percent, in a study that noted the wealth estimates for the richest Washingtonians were probably understated. Those in the bottom 10 percent had a negative net worth.
“Washington has a top-heavy income and wealth distribution,” the study concluded. On the other hand, economic mobility was not dead. Slicing the households into tens, the researchers found that more households moved to a higher slice than a lower one, and lower groups were more likely to move up. Incomes and wealth were reduced for all groups by the Great Recession, with the higher-end taking a bigger hit. Those in the middle held their own. Also, every group lost purchasing power from 2005 to 2009.
Another finding: State and local taxes are regressive, with a bigger burden falling on the least well off. “People in the lowest income decile paid 4.5 times more in taxes as a percentage of income as those in the highest decile. State and local taxes as a percent of personal income have generally been declining from 1995 to 2009. This is mainly from decreasing state taxes, which, measured as a percent of personal income, in 2009 were at the lowest point during the entire 1960-2009 period.”
All this is consistent with a state that has a creative-class economy that lavishly rewards those with acumen in technology and science, as well as a large investor cohort. But it’s also a state that still has a fairly strong manufacturing and trade sectors, along with unions, all of which aid in preserving middle incomes. You can download the entire report here.
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Today’s Econ Haiku:
Blue-collar scabs fine
Righteous fury rises when
They wear zebra stripes