This book examines real (inflation-adjusted) average household income, from 1979 to 2007 (because those endpoints allow comparisons between periods of similar overall economic activity as they were both years before recessions). During that period, the evolution of the nation's economy and the tax and spending policies of the federal government and state and local governments had varying effects on households at different points in the income distribution. The share in income accruing to higher-income households increased, whereas the share accruing to other households declined. As a result of that uneven income growth, the distribution of after-tax household income in the U.S. was substantially more unequal in 2007 than in 1979.