K-12 tax & spending climate: “Real median household income after taxes fell 8.8% to $64,240 from 2021 to 2022”

John Creamer & Matt Unrath:

In 2021, for example, post-tax income at the 10th percentile, meaning at the bottom of the income distribution, was 17.1% higher than the corresponding pretax income estimate, reflecting the substantial boost that lower-income households received that year from the EIP and expanded CTC.

In contrast, the 2022 estimates of pretax and post-tax income at the 10th percentile were not significantly different (Figure 1).

Lower post-tax income, particularly at the bottom of the income distribution, also resulted in an increase in income inequality.

The Gini index, a common measure of how spread out or unequal incomes are, for pretax income was 1.2% lower in 2022 than in 2021, reflecting real income declines at the top of the income distribution. However, the post-tax Gini index was 3.2% higher due to substantial declines in post-tax income among lower-income households.