Obama makes populist pitch on taxes, but income inequality data open to interpretation

President Obama is adamant about raising taxes on wealthier taxpayers. He argues everyone needs to pay their fair share, but the administration's argument goes beyond that.

"The vast majority of the American, the middle-class is getting screwed," Vice President Joe Biden said recently.

And Obama told a crowd in Iowa, "Over the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk."

But Scott Winship of the Brookings Institution argues that's not true.

"You often hear that the middle class is in decline and or shrinking, and that's just not the case," he said.

He points to a study from the Congressional Budget Office to make his point.

"Since 1979, the average income of a household in the middle fifth has increased by a third. For the bottom fifth it's actually increased by 40 percent."

Furthermore, it's debatable whether gains by someone like Facebook founder Mark Zuckerberg, who made billions when Facebook went public, come at the expense of those who make less.

"I dont think there's lots of evidence that's the case," Winship said. "It's unclear that anybody is worse off because of that."

The latest report from the Congressional Budget Office also shows that of the total income taxes collected, the bottom 20 percent in income pays only 0.3 percent of total taxes collected.

The middle 20 percent pays 9.4 percent. And the top 20 percent pays a whopping 67.9 percent of total income taxes.

Analysts also say income distribution is not like geological strata -- set in stone and immovable -- but rather like an escalator, with people moving up and down over time.

"If you are born in the lowest 20 percent, the likelihood is you're not going to end up in the lowest 20 percent," says Jim Kessler of the Democratic think tank Third Way.

That is in part because as people start their careers, their incomes are low, and as they advance and get more experience or get married or start a business, their income grows.

"About 60 percent of people who started in the bottom fifth make it out of the bottom fifth 10 years later," Winship said.

The CBO report also noted that while the bottom 80 percent lost 5 percent or less in income during the recession, the top fifth lost 18 percent and the top 1 percent suffered a 36 percent decline in income -- though top earning households typically count investment income to a larger degree than lower-income households.