Wednesday, January 28, 2015
New York Times: Gains From Economic Recovery Still Limited to Top One Percent, by Justin Wolters:
Emmanuel Saez, the economics professor who crunches these numbers based on data provided by the Internal Revenue Service, has just released preliminary estimates for 2013. The share of total income (excluding capital gains) going to the top 1 percent remains above one-sixth, at 17.5 percent. By this measure, the concentration of income among the richest Americans remains at levels last seen nearly a century ago.
It is tempting to note that the latest reading is somewhat below the 18.9 percent share that was recorded in 2012. But Professor Saez warns against reading too much into this year-to-year change. The problem is that his estimates rely on tax data, and tax rates on the rich rose sharply in 2013, leading many to shift taxable income out of 2013, and into 2012. Thus, the latest estimate is probably too low, just as the previous year’s number was probably too high.
When we count the robust increase in capital gains, the overall recovery appears stronger. But because capital gains are largely enjoyed by the rich, it remains the case that nearly all the fruits of that recovery have gone to the rich.
(Hat Tip: Mike Talbert.)