I wish to compare today's income to the 1960s. I wan't to do this both because we currently have a thread going on with regards the effects of income inequality: https://www.physicsforums.com/showthread.php?t=602615 and because of an article I read a while back that I found particularly offensive. Why Economics Can't Explain Our Cultural Divide Even during upturns, blue-collar Americans are marrying and working less, writes Charles Murray I also found a quote from the above offensive article in the income inequality thread. I wish to begin by consider an article I posted in the above thread. Ironically, I got a response saying that income inequality is something we don't need to prove. This is roughly true but aside for the top 1%, top .1% etc. the picture isn't as clear. More importantly there are some question about how the general living standards compare and it is argued in the above thread by "Rus" that absolute well-being is more important then relative. If we need more evidence about that doubt exists as to the general well-being of america have a look at: http://www.opednews.com/articles/Which-America-Do-You-Live-by-Arlen-Grossman-120505-36.html So let us begin. Well, the government gathers inflation statistics, if we doubt these these statistics we can look for historical evidences of prices and judge for our self if the results our reasonable. Here is a table comparing the budget for an average houshold between now and the 1960s Code (Text): Yearly Expenses per Average Household Category 1960 1960Today 2008 Food $1,681 $11,681 $11,058 General Household $2,491 $17,314 $24,305 Transportation $ 759 $ 5,277 $ 9,601 Health Insurance $ 107 $ 741 $13,968 Federal Taxes $1,884 $13,096 $21,138 State & Local Taxes $ 767 $ 5,331 $12,637 Total Expenses $7,689 $53,440 $92,707 http://www.clearpictureonline.com/1960-Summary.html The CPI was used to compare 1960 prices to today but I believe the actually prices may have been independently gathered. We should compare these numbers to the average weights used by the CPI for each type of good: http://www.bls.gov/cpi/cpit01test1111.htm The CPI does not include tax. Perhaps this is the first thing we should look at. Does the above table accurately reflect the relative tax burden differences between today and the 1960s?