The current issue of Lloyds Bank Review contains an article by R.J. Nicholson, "The Distribution of Personal Income," which provides some useful information refuting the supposed trend to equality in incomes. The author is interested in trends and therefore considers unimportant such deficiencies of national income estimates as the confusion of invidual and family incomes, and the failing to take into account undistributed profits and tax avoidance (which would throw doubt on the value of any comparisons between income groups at one point in time.)
Between 1949 and 1957, it is suggested, there was a general levelling out of pre-tax incomes. Whereas between 1959 and 1963 all incomes increased by a roughly similar percentage - betwenn 25 and 27% In addition the ana. lysis shows the nature of the 1949-57 "levelling out" was really a redistribution from the extremes to the middle income groups - e.g, the bottom 30% of incomes receivers find that their share has declined by 24% by 1959, whilst the top 10% income bracket's share declines by only 12%, After 1957 there are no significant changes in the distribution of pre-tax incomes, What of the great leveller cf progressive taxation? The tables show that whereas after tax incomes have been tending more towards equality this . is true only of those up to £2,000 - the upper income brackets were paying proprtionately less tax in 1962/3 than they had been in 1956/7.
The most significant explamation given of the end of the equalitarian trend in income lies in the differing rates of growth of different types of personal incomes, Salaries grow twice as fast as wages between 1957- 63, and the latter rate of increase was exceeded also by that of professional persons. More startling is the 12% increase in the income from rent, dividends and interest - as against the 29% increase in wages more than a reversal of the relative increase in these types of personal incomes in the 1949-57 period.