Household incomes have fallen faster since the end of the Great Recession than they did during it, even as corporations have returned to greater profitability than they reached before the Great Recession. Corporate profits passed their pre-recession levels earlier this year, but according to a new study from Sentier Research, household incomes have fallen behind, dropping nearly five percent from June 2009 to June 2012. During the recession, incomes dropped just 2.6 percent, as the Washington Post reports:

Incomes have dropped more since the beginning of the recovery than they did during the recession itself, when they declined 2.6 percent, according to the report, which analyzed data from the Census Bureau’s Current Population Survey. The recession, the most severe since the Great Depression, lasted from December 2007 to June 2009.

Overall, median income is 7.2 percent below its December 2007 level and 8.1 percent below where it stood in January 2000, which was at $55,470, according to the report.

Corporate profits are at record levels, reaching an all-time high of 11 percent of the nation’s gross domestic product in July. But instead of re-investing that cash into jobs that will help the economy recover, corporations are sitting on cash — the members of the Standard and Poor’s 500 held $800 billion in cash in June 2011.

And while they are loathe to spend money on new workers, many of America’s companies have had no problem enriching executives. Even as some companies layoff workers, they have spent money on share buybacks that make executives rich. Executive compensation, meanwhile, has grown 127 times faster than worker pay over the last three decades, and many companies have paid outlandish bonuses and salaries to executives even as they layoff workers.

All of that has had an effect on the American middle class, which, according to a study released today by Pew Research Center, had its “worst decade in modern history” during the first 10 years of the 21st century.

A recent analysis based on the loose outlines of Mitt Romney’s proposed tax plan — which would disproportionately benefit the wealthy and corporations — found that to remain revenue neutral, as Romney insists it will, it would have to raise taxes on middle- and lower-class families. The result, the Tax Policy Center concluded, is that middle class families would see a $2,000 tax hike, and that is based on the most generous assumptions, since Romney has yet to provide specific details of the plan.

In its analysis, TPC assumed Romney would pay for the corporate tax cuts by closing loopholes in the corporate tax code, but this week, the Romney campaign said that was not the case. Instead, the campaign told TPC that “cuts in corporate tax preferences were not meant to finance the initial rate cut to 25 percent but instead would pay for a subsequent revenue-neutral set of proposals that would reduce corporate rates further and enact a territorial system.”

By taking the corporate loopholes off the table, Romney is ensuring that middle class families will see an even larger tax hike than TPC previously assumed, as Center for American Progress Action Fund Director for Fiscal Reform Seth Hanlon noted in a column published today:

The TPC authors confirm that accounting for Romney’s unpaid-for corporate tax cuts would necessitate “even larger cuts to tax expenditures [i.e. tax breaks], and correspondingly larger increases in taxes on middle- and/or lower-income taxpayers,” than their original study found.

How big? The original TPC study found that in a single year, 2015, Romney’s plan would shift at least $86 billion of the tax burden from households with incomes over $200,000 to households with incomes below that level. TPC estimates that in the same year, Romney’s unpaid-for corporate tax cuts would cost $96 billion. Therefore, the tax increases on the middle class that TPC originally estimated – at least $2,000 for families and $500 for all taxpayers with incomes under $200,000 – would likely be around twice as much if Romney’s unpaid-for corporate tax cuts are taken into account.

That’s right: according to the TPC analysis — which, again, uses the most generous assumptions to fill in the blanks Romney left in the plan — the Romney plan would raise the average middle class family’s tax rate by as much as $4,000 to finance trillions of dollars in tax cuts for the rich and corporations. That includes the cost of a transition to a tax system that not only dramatically lowers the amount corporations will pay on domestic profits, but also the amount they pay on profits earned overseas and return to the U.S. — a system that will encourage outsourcing and further stashing of profits in offshore tax havens.

The middle class is shrinking, and so is its share of America’s income and wage growth, according to a new study released Thursday. The study from the Pew Research Center found that the middle class — defined as Americans with incomes between $39,000 and $118,000 — fell backward in income for the first time since the end of World War II, and the number of Americans who fit into that category shrunk from 61 percent in 1971 to just 51 percent in 2011.

The share of income that went to the middle class also fell during the first decade of the 21st century, a 10-year period that featured two damaging recessions, including the worst economic downturn since the Great Depression, and a major housing crisis. The share of income that went to the wealthiest Americans, however, has grown substantially since 1970, as the Washington Post notes:

In 1970, the share of U.S. income that went to the middle class was 62 percent, while wealthier Americans received just 29 percent. But by 2010, the middle class garnered 45 percent of the nation’s income, tying a low first reached in 2006, compared to 46 percent for upper-income Americans.

Since 2000, the median income for America’s middle class has fallen from $72,956 to $69,487.

The Pew survey is the latest to note rising income inequality in America as the middle class continues to struggle while the wealthy remain relatively prosperous. Income inequality in the U.S. is now comparable, if not worse, than it is in countries like Ivory Coast and Pakistan, as middle class wages have stagnated. A 2010 Census Bureau study found that incomes for the bottom tier of Americans fell four times faster than they did for the wealthiest after the recession.

The “lost decade” for the middle class corresponds to declining tax rates for the wealthy and a growth in corporate profits. In the last 12 years, incomes for the wealthiest 400 Americans quadrupled even as their tax rates were halved, and executive compensation has grown 127 times faster over the last three decades than worker pay, one study found.

In the late 1990s, Citicorp made waves on Wall Street by pioneering what is known as “supermarket banking” — the idea that financial institutions could provide a host of services, including stock trading, real estate brokerage, and insurance, in addition to traditional deposit banking. Citicorp, led by chief executive Sanford Weill, purchased insurance giant Travelers Group and became Citigroup, and in subsequent years, other banks followed its model, creating the financial supermarkets that are prevalent today.

A decade and a half and a major financial crisis later, current Citigroup CEO Vikram Pandit now says the supermarket model is no longer a viable option for his bank, which nearly collapsed in the 2008 banking crisis that helped trigger the Great Recession. In a presentation at Singapore’s Lee Kuan Yew School of Public Policy, Pandit said supermarket banking “is a strategy that I don’t believe is right for the times,” American Banker reports:

The 1998 merger of Citicorp with insurer Travelers Group Inc. “didn’t turn out to be everything people thought it was going to be,” Pandit said today during a presentation at Singapore’s Lee Kuan Yew School of Public Policy. “The focus of that merger, which was supermarket banking or financial supermarket, is a strategy that I don’t believe is right for the times. Not only that, I don’t believe it’s right for our bank.”

Weill, the original architect of supermarket banking, said last month that it was time to break up the big banks, a position that has been echoed by other former banking executives. Pandit said this week that he disagrees with that sentiment because Citigroup has returned to the core of what it was before it was a supermarket. “Getting out of that strategy is what we’ve done,” Pandit said. “And now we focus on what is really the core banking business of this institution.”

Whether Citi has actually returned to its commercial banking roots is questionable. The New York Times reported that Citi had more assets in risky global capital markets in the second quarter than any bank but Goldman Sachs, and it is “more reliant on often volatile Wall Street businesses” than it used to be. “In 1998,” the Times wrote, “Citicorp’s trading revenue was 8 percent of its total revenue. By contrast, trading revenue last year accounted for 23 percent of the Citicorp unit’s total.” Citi did, though, announce earlier this year that it would cut its proprietary trading desk ahead of implementation of the Volcker Rule, which bans banks with government backing from engaging in risky prop trades.