Defined in the order they matter most for reading the treatise’s six core metrics, followed by commonly referenced tax, budget, and legislative terms.
Gini coefficient
A single number from 0 to 1 (or 0 to 100) summarizing income or wealth inequality across an entire population. Zero means everyone has exactly the same income or wealth; one means a single person has all of it. Useful for comparing countries or tracking long-run trends, but it hides where in the distribution inequality is concentrated.
Income share of the bottom 50%
The percentage of total national income that goes to the lower half of earners. A falling share means the bottom half is claiming a shrinking slice of a growing pie, even if their incomes are still rising in dollar terms.
Wealth share of the top 10%
The percentage of total household net worth (assets minus debts) owned by the richest tenth of households. Wealth is far more concentrated than income in the United States, and tends to compound over time in a way income does not.
Labor share of national income
The portion of total economic output paid out as wages and salaries, as opposed to the portion captured as corporate profits, rents, or capital gains. A falling labor share means workers are getting a smaller slice of what the economy produces, even during periods of overall growth.
Real vs. nominal
“Nominal” dollar figures are not adjusted for inflation; “real” figures are. A real increase means purchasing power actually rose; a nominal increase might just reflect rising prices.
Median vs. mean (average)
The median is the middle value when everyone is lined up from poorest to richest — half are above it, half below. The mean is the simple average. Because a small number of very wealthy households can pull the mean far above what a typical household actually has, the median is generally the more representative figure for describing a “typical” household.
Net worth
The value of everything a household owns (home equity, retirement accounts, savings, investments) minus everything it owes (mortgage, credit card debt, student loans, other liabilities). This is what “wealth” means throughout this treatise, as distinct from income.
Marginal tax rate
The tax rate applied to the last dollar of income earned, not to all of a person's income. The U.S. income tax is bracketed, so raising or cutting the “top rate” changes what high earners pay on their highest-bracket income, not their entire income.
Refundable tax credit
A tax credit that can reduce a filer's tax bill below zero, resulting in a cash payment, as opposed to a non-refundable credit that can only reduce taxes owed down to zero. The Earned Income Tax Credit and the expanded Child Tax Credit are refundable, which is what allows them to reach families who owe little or no income tax.
EITC (Earned Income Tax Credit)
A federal tax credit for low- and moderate-income working individuals and families, widely regarded by economists as one of the most effective anti-poverty tools in the tax code because it supplements wages rather than replacing the incentive to work.
AFDC / TANF
Aid to Families with Dependent Children (AFDC) was the federal cash-assistance entitlement for poor families with children from 1935 until 1996, when it was replaced by Temporary Assistance for Needy Families (TANF), a fixed block grant to states carrying work requirements and time limits rather than an open-ended entitlement.
Medicaid expansion
A provision of the Affordable Care Act allowing states to extend Medicaid eligibility to more low-income adults, with the federal government covering most of the added cost. States could choose whether to adopt it, and many initially declined.
Quantitative easing
A central bank tool (used heavily by the Federal Reserve after 2008 and again in 2020) involving large-scale purchases of government bonds and other securities to lower long-term interest rates and increase the money supply during a crisis, generally supporting asset prices in the process.
Sequestration
Automatic, across-the-board spending cuts triggered by law when Congress and the President fail to agree on a budget meeting certain deficit targets, as under the 1985 Gramm-Rudman-Hollings Act and the 2011 Budget Control Act.
Reconciliation
A fast-track legislative process that allows certain budget-related bills to pass the Senate with a simple majority rather than the 60 votes normally needed to end a filibuster. Many of the treatise's most consequential, one-sided laws (ERTA, OBRA-1993, the TCJA, the American Rescue Plan, the One Big Beautiful Bill Act) passed via reconciliation.
Basis point / percentage point
A percentage point is one full point of percentage (e.g., a rate moving from 5% to 6% is a one-percentage-point increase). A basis point is one-hundredth of a percentage point, used mainly in discussing interest rates.
Unified vs. divided government
Unified government means the President's party controls both chambers of Congress; divided government means at least one chamber is held by the opposing party. See the Congressional Control page for how this shaped which policies could pass in each term.