Working Paper: NBER ID: w27922
Authors: Emmanuel Saez; Gabriel Zucman
Abstract: This paper studies inequality in America through the lens of distributional macroeconomic accounts—comprehensive distributions of the aggregate amount of income and wealth recorded in the official macroeconomic accounts of the United States. We use these distributional macroeconomic accounts to quantify the rise of income and wealth concentration since the late 1970s, the change in tax progressivity, and the direct redistributive effects of government intervention in the economy. Between 1978 and 2018, the share of pre-tax income earned by the top 1% rose from 10% to about 19% and the share of wealth owned by the top 0.1% rose from 7% to about 18%. In 2018, the tax system was regressive at the top end; the top 400 wealthiest Americans paid a lower average tax rate than the macroeconomic tax rate of 29%. We confront our methods and findings with those of other studies, pinpoint the areas where more research is needed, and describe how additional data collection could improve inequality measurement.
Keywords: income inequality; wealth inequality; distributional accounts; macroeconomic data
JEL Codes: D31; H20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic policies and market dynamics (E69) | income distribution (D31) |
| tax system (H20) | income distribution (D31) |
| growth in wealth (O49) | income growth (O49) |
| wealth accumulation (E21) | income growth (O49) |
| government interventions (H53) | income and wealth concentration (D31) |
| decline in national income reported in tax data and surveys (H20) | income distribution (D31) |