Socialist Security #1

Doug Henwood dhenwood at
Thu Jul 23 16:24:02 PDT 1998

Marta Russell wrote:

>No answer to your question but something relevant to consider . . .
>Michael Parenti did some investigation which revealed that the richest
>of Americans are NOT included in data regarding wealth. I briefly heard
>him make this statement on KPFK radio but have not done my homework to
>read the details although I think the crux of his statement may be that
>the Census Bureau omits the super wealthy...A fascinating accomplishment
>on behalf of the rich. Parenti concludes that reports about income
>inequality are skewed (obviously) but the omission would also have an
>impact on accurately figuring the number of households with incomes over

The Census Bureau treats all income over a certain amount - around $300,000, I think - as equal to that number, a practice called topcoding. It's supposed to protect anonymity of the sample, but it does understate the income of the rich. The CBO used to combine those numbers with tax records to get a better picture of the distribution; they don't anymore. (EPI was going to pick that up - did you, Max?). But for 1992, here's the comparison:

DISTRIBUTION OF INCOME, 1992 Congressional Budget Office

and Census estimates

CBO Census CBO-Census income lowest quintile 3.8% 3.8% +0.0% $ 8,274 second quintile 9.2% 9.4% -0.2% 19,686 third quintile 14.9% 15.8% -0.9% 31,973 fourth quintile 21.8% 24.2% -2.4% 46,909 top quintile 50.3% 46.9% +3.4% 108,300

top 5% 25.2% 18.6% +6.6% 216,483

top 10% 35.2% 151,619 top 1% 13.2% 566,674

The main effect is to lower the income share of the fourth quintile and raise the fifth, mainly because the top 5% goes up.

The Fed's Survey of Consumer Finances goes out of its way to find and oversample rich people, though it misses the very very top of the distribution. For them, says SCF chief Arthur Kennickell, look at the Forbes 400.


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