The Rise of Income and Wealth Inequality in America: Evidence from Distributional Macroeconomic Accounts

31 Pages Posted: 14 Oct 2020 Last revised: 18 Apr 2021

See all articles by Emmanuel Saez

Emmanuel Saez

University of California, Berkeley

Gabriel Zucman

University of California, Berkeley - Department of Economics

Date Written: October 2020

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.

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Suggested Citation

Saez, Emmanuel and Zucman, Gabriel, The Rise of Income and Wealth Inequality in America: Evidence from Distributional Macroeconomic Accounts (October 2020). NBER Working Paper No. w27922, Available at SSRN: https://ssrn.com/abstract=3709612

Emmanuel Saez (Contact Author)

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

Gabriel Zucman

University of California, Berkeley - Department of Economics ( email )

579 Evans Hall
Berkeley, CA 94709
United States

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