CHART: Remember When Poor People Saw Their Incomes Grow Faster Than Rich People?

[JHB]

14. Reagan was still in the process of dismantling the things that tied...

...the very high levels to the rest of the economy. New laws and new (de)regulations had to propagate, and the top marginal tax rate was 50% through mist of Reagan's presidency. It was only in his last year or two that it was slashed again to 28%. And the entire time, unprecedentedly-large budget deficits were put on the Federal tab.

The spike you see under Bush I was basically the fruit of the poicies planted and nurtured under Reagan. You can also see how the Reagan years the zone where the incomes of the bottom 90% pretty much got decoupled from the fortunes of those much higher up the scale.

As for the fall, that's probably an effect of the 1987 Black Monday crash (my best guess, anyway, and the 0.01% would likely be most affected by stock market effects).