How Progressive is the U.S. Tax System?
- Date Posted:
- Is Database:
- Database
- Is Important:
- Important
Showing 157 database articles primarily about Inequality
Recent Trends in Personal Income & Wage Inequality
AI Summary. New York City's top 1% captured nearly two-thirds of real income growth between 2019 and 2024, versus under 40% nationally, driven by capital gains, dividends, and business income rather than wages.
Jonathan Siegel and Jason Bram Office of the New York City Comptroller- Date Posted:
- Is Database:
- Database
Btw 2019 and 2024, pre-tax, pre-transfer real median income in New York City fell 3.2%. The top .1% tax units, ~ households, (mean income ~$24mm) saw real growth of ~25%, whereas the bottom 90% (mean income ~$45,000) fell 0.8%.
Is capital income concentration widening faster in major cities than nationally?
Core argument: Nearly two-thirds of New York City’s real income growth from 2019–2024 accrued to the top 1%, versus under 40% nationally, driven by faster-rising capital gains, dividends, and business income rather than wage divergence.
Between 2019 and 2024, the New York City’s income shares at the top of the distribution rose faster than the nation's, and nearly two-thirds of the real income growth over the period accrued to the top 1%, compared with under 40% nationally. The result also holds when volatile capital gains are excluded. Real median income fell over the period, and real average income for the bottom 90% of tax units was essentially flat. Adjusted for local prices (but not for transfer programs), the purchasing power of income for the lower 90% of New Yorkers is close to one-fifth below that of the bottom 90% nationally. The divergence at the top is predominantly a story of non-wage income. Wage and salary income shows a much milder widening, and occupational wage data that exclude bonuses show base pay growing faster in lower-wage occupations than in higher-wage ones, and within many occupational groups wages are converging rather than growing more unequal.Takeaways by Macro Roundup® AI
- Nearly two-thirds of New York City’s real income growth from 2019–2024 accrued to the top 1%, versus under 40% nationally, driven by faster-rising capital gains, dividends, and business income rather than wage divergence.
- The bottom 90% of New York City earners hold purchasing power roughly one-fifth below their national counterparts after adjusting for local prices, even before accounting for transfer programs.
Related Articles:
- As New Jobs In Finance Dry Up, New York City’s Fiscal Model Is Wilting — Since January 2020, private sector real hourly earnings have fallen 9% in New York City, while increasing 3% nationally, as large firms based in NYC move jobs…
- Where is Standard of Living the Highest? Local Prices and the Geography of Consumption — For non-college Americans, high local prices mean lower living standards. “A high school drop-out household moving from the least expensive commuting zone to…
- The Demographic Trends That Shaped Mamdani’s Win — Voters under the age of 45, 46% of registered voters in New York City, made up ~43% of voters in the mayor’s race. In neighborhoods where the nonwhite…
US Corporate Profits Surge To Record As Worker Payouts Wilt
AI Summary. U.S. corporate pre-tax profits reached an annualized $4.8tn, or 18% of national income—the highest share since the post-WWII era—while workers' wages and benefits fell to 60% of national income, the lowest since the 1950s.
Myles McCormick Financial Times- Date Posted:
- Is Database:
- Database
Corporate profits have risen to 18% of national income, their highest share since 1947, while labor’s share has fallen to 60%, a low not seen since the 1950s. The decline in labor’s share has accelerated over the past year.
Are record corporate profits coming at workers' expense?
Pre-tax earnings hit an annualised $4.8tn in the second quarter, or 18% of national income, according to Bureau of Economic Analysis data, the highest share since the aftermath of the second world war. Employees’ share from wages and benefits fell to 60%, the lowest level since the 1950s. “Regardless of what measure you look at, workers, in terms of employee compensation, have been receiving an increasingly small share of national income over time,” said Abiel Reinhart, an economist at JPMorgan. The decline in labour’s share of income has gained pace in the past five years and especially over the past 12 months.Related Articles:
- The Post‑COVID Decline in the Labor Share — The labor share of income has fallen 1.6 percentage points below its pre-pandemic level, reaching an all-time post-war low, driven by within-industry dynamics rather than shifts in activity across sectors.
- Are US Corporate Profit Margins Too High? — In Q1 2026, US after-tax non-financial margins were estimated at 7.6%, just short of the post-1949 high of 8.2% in Q2 of 2021. Tan Kai Xian argues US corporate…
- Why the Labor Share Keeps Falling: Taxes! — Tax code changes account for roughly one-third of the decline in the worker share of U.S. business income since 1978, as firms shift from corporate to pass-through structures to reclassify wages as profits and reduce tax burdens.
The Rise Of The Deserving Rich
AI Summary. Billionaire wealth from self-made entrepreneurs in competitive sectors has reached an all-time high, with fairly earned wealth now accounting for half of total billionaire wealth globally, while wealth from politically connected industries has declined since 2021.
Economist Staff The Economist- Date Posted:
- Is Database:
- Database
- Is Important:
- Important
An Economist analysis of the wealth of 7,000 billionaires finds that over the past decade, the share of billionaire wealth “derived from self-made entrepreneurs in competitive sectors has surged to an all-time high.”
Does self-made wealth now dominate billionaire fortunes globally?
Core argument: For the first time in the 25-year dataset, half of global billionaire wealth derives from self-made entrepreneurs in competitive sectors, marking a structural shift away from politically connected and inherited fortunes.
Drawing on data from Forbes, a magazine, Hurun, a research firm, and Gapminder, a Swedish foundation, we have assembled a list of about 7,000 billionaires from the past 25 years. We call a billionaire’s wealth “uncompetitive” when it mainly comes from industries such as gambling, construction, defence, and raw materials. These sectors often depend on political access. We count inheritors in the “uncompetitive” category. From 2001, when our data begin, to 2014, the uncompetitive share of billionaire wealth rose slightly. Yet over the past decade, the share derived from self-made entrepreneurs in competitive sectors has surged to an all-time high. For the first time, half the wealth of the world’s billionaires is reasonably fairly earned. And since 2021, the total wealth derived from uncompetitive sectors has declined.Takeaways by Macro Roundup® AI
- For the first time in the 25-year dataset, half of global billionaire wealth derives from self-made entrepreneurs in competitive sectors, marking a structural shift away from politically connected and inherited fortunes.
- The uncompetitive share of billionaire wealth—spanning gambling, construction, defence, raw materials, and inheritance—rose modestly from 2001 to 2014 but has declined in absolute terms since 2021.
- Inherited wealth, though typically lawfully held, represents a policy failure in wealth distribution, as heirs’ fortunes reflect birth advantage rather than competitive value creation.
Related Articles:
- AI is the Democratic Party’s Next Villain — Anti-AI rhetoric is emerging in Democratic fundraising messaging at the same adoption rate that anti-billionaire language showed in 2019, driven by the party's progressive wing and framed not as a jobs or safety concern but as an extension of billionaire power.
- America’s Support for Capitalism Has Declined Over Last Decade — American confidence in capitalism has fallen from 60% to under 50% over the last decade, while only 12% believe democracy is working well and just 35% believe the economy offers a fair path to prosperity.
- The Economics of Inequality in High-Wage Economies — Inequality is mostly the result of an increasing premium on returns from risk and high-skilled labor ushered in by technological disruption and the feedback…
Another Reason the Labor Share Keeps Falling: Taxes!
AI Summary. A shift of ~$200bn in worker pay into corporate profits as stock-based compensation could explain roughly one-third of the long-run decline in labor's share of income, as stock ownership allows high earners to receive tax-preferred pay recorded as profits rather than wages.
Owen Zidar and Eric Zwick The Everywhere Millionaire- Date Posted:
- Is Database:
- Database
- Is Important:
- Important
Zidar & Zwick suggest about one‑third of the post‑1970s drop in labor’s share is due to stock‑based pay to workers, in addition to the one‑third they already attribute to pass‑through income. That leaves only around one‑third for genuine shifts in technology, power, etc.
Does tax-preferred stock compensation explain the labor share decline?
Core argument: $200bn in missing labor compensation since the late 1970s drives roughly one-third of the labor share decline, reflecting tax-advantaged stock.
In our data for 2017, after adjustments for the rise of pass-throughs, we report employee compensation of $7.2 trillion and corporate value added of $12.2 trillion. The unadjusted corporate profits number (which excludes partnership profits) is $1.7 trillion. If we could find around $200 billion of “missing” labor compensation, that would account for about a third of the fall in the labor share since the late 1970s. Thus, if workers owned a bit above 10% of those corporate profits via stock compensation, then that would cover the difference. Distributing this amount across the top 10% of public company employees, of which there are 4.2 million, this ownership would imply an additional $40,000 or so in pay. The aggregate numbers are thus quite plausible in terms of how much pay might have shifted to corporate profits serving as tax-preferred payments to high earners.Takeaways by Macro Roundup® AI
- $200bn in missing labor compensation since the late 1970s drives roughly one-third of the labor share decline, reflecting tax-advantaged stock.
- Top 10% of public company employees ($40k additional implicit pay via equity ownership) concentrate gains that would equal $200bn aggregate.
- $12.2tn corporate value added vs. $7.2tn employee compensation reveals labor’s shrinking claim on output, as tax-preferred equity arrangements redirect worker.
Related Articles:
- Why the Labor Share Keeps Falling: Taxes! — Tax code changes account for roughly one-third of the decline in the worker share of U.S. business income since 1978, as firms shift from corporate to pass-through structures to reclassify wages as profits and reduce tax burdens.
- Human Capitalists — Equity Based Compensation ~45% Of Total Comp Of High-Skilled Labor, Including It In Labor Share Cuts Decline of Labor Share Since The 1980’s By 60%.
- Capitalists in the Twenty-First Century — Most income at the top of the US income distribution is non-wage income, primarily derived from private business profits, according to @MatthewSmith…
Do Past Wealth Gaps Explain Modern Inequality? Evidence From Immigration To The United States
AI Summary. European immigrants who arrived with nearly no wealth converged to similar wealth levels as earlier European settlers within a few generations, while Black, Cuban, Mexican, and Puerto Rican households remained substantially behind, indicating that initial wealth gaps do not uniformly predict long-run inequality across all groups.
Brian Marein Wake Forest University- Date Posted:
- Is Database:
- Database
- Is Important:
- Important
Except possibly at the very top of the distribution which SIPP cannot measure, the wealth of “new” Southern and Eastern European immigrants to the US has fully caught up with “old” immigrants. Wealth converges quickly once earnings inequality vanishes.
Does initial wealth explain persistent inequality across immigrant groups?
Core argument: By 1920, 50% of white adults were foreign-born or had foreign-born parents, yet Southern and Eastern European descendants achieved wealth.
Inferring the determinants of long-run inequality from group-level data is complicated by the arrival of 30 million Europeans during the Age of Mass Migration (roughly 1850 to 1924), who are by construction included in average white wealth despite having no direct claim to the wealth accumulated by earlier Americans. By1920, nearly half of white adults were either foreign-born or had foreign-born parents. Using the United States Immigration Commission Reports (commonly known as the Dillingham Commission Reports), I document that immigrants at the turn of the twentieth century arrived with almost no wealth. [Thus] a large share of the white population started from a substantial wealth disadvantage. Northwestern Europeans comprised the overwhelming majority of earlier immigrants, dating back to the initial European settlement of North America, while Southern and Eastern Europeans predominated at the turn of the twentieth century. If initial wealth disadvantages persisted across generations, one would expect households of Southern or Eastern European ancestry to possess less wealth than those of Northwestern European ancestry, since their families arrived later and started with substantially fewer resources. In fact, they do not. On average, they are wealthier.Takeaways by Macro Roundup® AI
- By 1920, 50% of white adults were foreign-born or had foreign-born parents, yet Southern and Eastern European descendants achieved wealth.
- European immigrants arrived at the turn of the twentieth century with nearly zero wealth, yet their descendants’ wealth distributions converged.
- White ancestry groups exhibit nearly identical wealth distributions by 1980–1990 despite staggered arrival times spanning 270+ years, while Black, Cuban.
Related Articles:
- The Myth of Nordic Mobility: Social Mobility Rla — Social mobility in Denmark and Sweden is far lower than conventional measures indicate, with family background determining educational outcomes almost as strongly as in 19th-century England. Generous public education funding and income compression have only modestly reduced the role of family in shaping children's outcomes.
- 00 to 2022 — Gregory Clark @PNASNews finds that social status in England was strongly correlated across generations between 1600 and 2022, consistent with a theory of…
- Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility — Raj Chetty @OppInsights finds that a white child born into the bottom household income quintile in 1992 had a 29.7% chance of remaining there, up from 24.9% in…
The Great $110 Trillion Wealth Transfer Won’t Happen Any Time Soon
AI Summary. Bequeathable wealth in the U.S. rose from 256% to 424% of GDP between 1997 and 2021, with 97% of that increase concentrated in households headed by someone 55 or older. The wealthiest 10% of that age group drove 75% of the total gain, meaning inherited wealth is becoming increasingly concentrated
Rachel Louise Ensign and James Benedict Wall Street Journal- Date Posted:
- Is Database:
- Database
The age at which Americans are inheriting money has risen. According to Federal Reserve surveys, btw 1998 and 2010, Americans in their late 50s were most likely to report receiving an inheritance; by 2013–2022, that age had ticked up to the mid 60’s.
Will the concentration of inherited wealth impact economic equality?
Core argument: Bequeathable wealth surged to 424% of GDP in 2021 from 256% in 1997, with 97% of gains concentrated in households.
Fed data [indicates] that what is known as the bequeathable wealth rose from 256% of gross domestic product in 1997 to 424% in 2021, the last year of available data. A staggering 97% of that increase was due to wealth gains in households where the head of household was 55 or older. Older Americans may keep accumulating wealth, especially if the stock market keeps rising. But some will spend it on living costs and expensive long-term care, leaving less for heirs. When they die, many will leave their money to their spouses, who are often in their same generation. This year, around $1.3 trillion is expected to be passed onto spouses, compared with about $2 trillion to heirs in Gen X and younger generations, according to projections from research firm Cerulli Associates.Takeaways by Macro Roundup® AI
- Bequeathable wealth surged to 424% of GDP in 2021 from 256% in 1997, with 97% of gains concentrated in households.
- The wealthiest 10% of households age 55+ captured 75% of total bequeathable wealth gains since 1997, resulting in widening inequality.
- Boomers accumulated $1tn+ in wealth during Q4 alone, outpacing all other generational groups, as stock and business valuations drive outsized.
Related Articles:
- A Preliminary Report on Taxing the Great Wealth Transfer: Revenue and Distributional Effects of Taxes on Estates, Inheritances, and Unrealized Capital Gains at Death — Bequeathable wealth/GDP has risen from 256% to 424% over 1997- 2021, but the current estate tax law yields ~$0 revenue. @BrookingsInst researchers propose an…
- Is Inherited Wealth Bad? — Existing data show ~80% of private wealth in early 20th-century Europe was inherited. In France and Sweden that fell to ~40% by 1975, but has since risen. In…
- How To Get Rich in 2025 — As baby boomers die, inheritances as a share of US output are over 10% which is just off a post-WW II high. For every $100 paid in wages, the dead leave behind…