Why did the USA invade Iraq?
by Sabastian Plappert
WEALTH INEQUALITY IN THE UNITED STATES SINCE 1913:
EVIDENCE FROM CAPITALIZED INCOME TAX DATA*
Emmanuel Saez and Gabriel Zucman
This paper combines income tax returns with macroeconomic household
balance sheets to estimate the distribution of wealth in the United States
since 1913. We estimate wealth by capitalizing the incomes reported by indi-
vidual taxpayers, accounting for assets that do not generate taxable income. We
successfully test our capitalization method in three micro datasets where we
can observe both income and wealth: the Survey of Consumer Finance, linked
estate and income tax returns, and foundations' tax records. We find that
wealth concentration was high in the beginning of the twentieth century, fell
from 1929 to 1978, and has continuously increased since then. The top 0.1%
wealth share has risen from 7% in 1978 to 22% in 2012, a level almost as high
as in 1929. Top wealth-holders are younger today than in the 1960s and earn a
higher fraction of the economy's labor income. The bottom 90% wealth share
first increased up to the mid-1980s and then steadily declined. The increase in
wealth inequality in recent decades is due to the upsurge of top incomes com-
bined with an increase in saving rate inequality.
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