If you're curious why: Income before taxes is not "income before taxes net of transfer payments." (It can't be, because one of the most salient transfer payme

If you're curious why: Income before taxes is not "income before taxes net of transfer payments." (It can't be, because one of the most salient transfer payments in the US, the EITC, is administered through the tax system.) One might assume that poverty is sticky and therefore the bottom 20% of earners is relatively constant, but while poverty might be sticky "low income in a year" is not sticky on a year-to-year or decade-to-decade basis. Many people in the lowest 20% for income were middle class N years ago and still are. They're spending out of their savings faster than their savings throw off interest/dividends. That's OK; their retirement math mandates it. ("Wait, how can you afford a mortgage on $10k a year of inc... oooooh.") Some folks also deal with substantial income volatility on a year-to-year basis. Relevantly to many HNers, there are a variety of structures in which business owners hit the bottom 20% in formative/bad years.