I is for Inequality

From a piece in the NYTimes today about Obama's proposed budget agenda:
Summer's little hypothetical grabbed me.
"As a result [of rising pretax incomes and reductions in tax rates for the wealthiest households over previous three decades], the average post-tax income of the top 1 percent of households has jumped by roughly $1 million since 1979, adjusted for inflation, to $1.4 million. Pay for most families has risen only slightly faster than inflation.

Before becoming Mr. Obama’s top economic adviser, Lawrence H. Summers liked to tell a hypothetical story to distill the trend. The increase in inequality, Mr. Summers would say, meant that each family in the bottom 80 percent of the income distribution was effectively sending a $10,000 check, every year, to the top 1 percent of earners."

Salaam.