(Bloomberg News) The 400 highest-earning U.S. households reported a total of $108.2 billion in income for 2008, a 21.5% decline from a year earlier and the first drop since 2002, according to Internal Revenue Service data.
The figure reflects the effect of the recession on the wealthiest U.S. taxpayers, who earned an average of $270.5 million in 2008, the most recent figures available. President Barack Obama and Democratic leaders in Congress have proposed increasing taxes on top earners to reduce the U.S. budget deficit. Republicans in Congress resist such plans.
The drop in income will do little to blunt those efforts. Average income reported by the 400 highest-earning taxpayers was more than five times higher in 2008 than it was in 1992, according to the data. Even when held constant for inflation, the income of those taxpayers rose almost four times during the same period.
"Democrats are focused on the top 1%," said David Kautter, the managing director of the Kogod Tax Center at American University in Washington. "Your income went down but you're still in that top 1%."
Recent polls suggest overwhelming public support for raising the taxes of top earners. An April McClatchy-Marist poll found 64% of respondents favor raising taxes for those with income exceeding $250,000, with 33% opposed.
The wealthy aren't the only U.S. taxpayers earning less as a result of the recession. A separate IRS report in April said adjusted gross income at all levels fell 6.9% in 2009 while unemployment compensation increased 91.5%.
Since 1992, there have been five instances of declining income among the top earners. Besides the 2008 drop, income fell 1% between 1992 and 1993, 0.3% between 1993 and 1994, 24.6% between 2000 and 2001 and 20.6% between 2001 and 2002.
Income at the top rose at a steep pace after President George W. Bush signed tax cut legislation in 2001 and 2003. The top 400 earners more than doubled their income between 2002 and 2005, according to IRS data.
The Bush-era tax cuts were extended in December and most are slated to expire at the end of 2012. Obama has said he won't extend them for individuals earning more than $200,000 a year and married couples making more than $250,000.