The graph below shows the annual income growth rate over a period of about 35 ye

Question

The graph below shows the annual income growth rate over a period of about 35 years. Based on the graph a person at the 50th percentile (wealthier than 50% of the population) saw an annual increase of 1%, while someone in the 99.999% (wealthier than 99.999% of the population) saw their income increase by 6% annually over the period. Provide at least 2 alternative interpretations (What does this chart say about income growth rates and what does that imply?) of what this graph could mean to the issue of Accountable Capitalism. Provide a 8. Average annual growth by percentile, 1980-2014 Top 0.001% P99.99 P99.9 1% 1% Income percentile third interpretation for extra credit.

Explanation / Answer

One interpretation is though income of rich increased more taxes contributed to equality. Without taxes income distribution was more unequal. Taxes increased share of income of lowest income holders

other interpretation is that share of wages have fallen but share of profits risen over the period. This shows capitalism can't provide enough solution on its own for vulnerable sections of society

Thirdly post tax income distribution though has favoured poor but Middle income groups have not been benefited much by it.

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