Has There Been An increase in inequality? The Debate

Thomas Piketty (Paris School of Economics), Emmanuel Saez (University of California at Berkeley) and Gabriel Zucman (University of California at Berkeley) – herein after PSZ – in a paper called “Rethinking Capital and Wealth Taxation,” advocate taxing billionaires with a progressive wealth tax.

PSZ argue that there has been a massive rise in income inequality since 2003. According to their latest data, the top 1 percent’s share of national income, after taxes are taken into account, rose from 9.1 percent in 1979 to 15.7 percent in 2014.

Gerald Auten (Office of Tax Analysis, U.S. Treasury Department) and David Splinter (Joint Committee on Taxation, U.S. Congress) in the paper  “Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends,” find that the share of income of the top 1% has not changed at all since 1960. In other words, there has been no increase in inequality as it relates the very highest income earners.

PSZ offer a critique of the Auten-Springer paper in the form of a “Comment.”

George Mason Professor Vincent Geloso and colleagues offer a rebuttal to PSZ, which is graphically pictured here. Hereinafter, this side is GAS. See also this post by Geloso.

Here is a nontechnical explanation of the issues at Vox.


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