Seems to me this headline in today’s New York Times should have been on the front page, not buried in the business section: “At The Very Top, A Surge in Income in ’03”, followed by a subhead that is even more revealing–“I.R.S. Data Show Thin Slice of Richest 1% Got Outsize Gains.”

Now, we here are not shocked by this development. But, David Cay Johnston (author of the terrific “Perfectly Legal,” which explains how the tax system is rigged on behalf of the rich) explains that, “After falling for two years, the share of income going to the richest slice of Americans – the top tenth of 1 percent – grew significantly in 2003 while the share going to 99 percent of Americans fell, tax data released yesterday showed.

At the same time, the effective income tax rates paid by the top tenth of 1 percent fell sharply, declining at more than 10 times the rate reduction for middle-class taxpayers, the new report, by the Internal Revenue Service, showed.

Overall incomes rose by 2.7 percent in 2003, compared with the previous year, the I.R.S. said. A quarter of this increase went to the top tenth of 1 percent, the 129,000 taxpayers with reported incomes of $1.3 million or more, an analysis of the data showed.”

Later, Johnston also explains that the situation is even worse than the I.R.S data show because the agency’s data tends “to understate incomes for those at the very top…” Geez, I’m sure they are just scraping by…

Finally, this point really drives home how perverted U.S. tax policy–supported by too many Democrats–has become: “Other data show that among major world economies, the United States in recent years has had the third-greatest disparity in incomes between the very top and everyone else. Only Mexico and Russia, among major economies, have greater disparity.”