from elsewhere:

Now for the TRUTH about the income gap

A week or so ago the Census Bureau released some new
statistics on what the media likes to call the
ever widening income gap between the 'haves' and
the 'have-nots'.

The Basics

The Census Bureau divides the American people into
five groups, called quintiles. These quintiles go
through low income, low-middle income, middle income,
middle-upper income, and high income Americans. In
its latest study the Census Bureau told us that the
top income earners (the top quintile) were earning
almost one-half of all income while the lowest earners
(the bottom quintile) were earning less than four
percent of the income. Furthermore, the gap between
the two was growing. This is the type of statistic
that is used to further the cause of income
redistribution. But is the statistic accurate?

No.

There are, according to Rector, at least four glaring
problems with the way the Census Bureau divides
income-earners into these five quintiles.

First
The income figures for these groups are incomplete.
They do not include many types of cash and non-cash
income.

Second
No adjustment is made for the effects of taxation.
The lowest quintile really does not pay federal
income taxes, while the highest pays at a rate
approaching or exceeding 40 percent.

Third
Oddly, there are unequal numbers of people in the
different quintiles. To be an accurate study each
quintile should contain 20 percent of our population.
That’s not the way it works. The top quintile
actually contains 24.3 percent of the population
while the bottom contains 14.8 percent. This in
and of itself will serve to exaggerate the so-called
income gap.

Fourth
To no surprise, the people in the top quintile simply
work harder and work more than the people in the bottom!
In fact, they work nearly twice as many hours? Wow!
What a surprise! Those who work twice as much earn a
great deal more! Let’s alert the media.

So --- here is the effect of all of these little tricks that
are played with the statistics.

Under the numbers as reported by the Census Bureau a person
in the top income quintile earns $13.86 for every $1.00
earned by a person at the bottom. Once you make the
adjustments outlined above, that ratio is reduced to
$3.07 to $1.00.

Quite a difference, isn’t it?

http://www.heritage.org/library/cda/cda99-07.html
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