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Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends

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  • Gerald Auten
  • David Splinter

Abstract

Concerns about income inequality emphasize the importance of accurate income measures. Estimates of top income shares based only on individual tax returns are biased by tax-base changes, social changes, and missing income sources. This paper addresses these shortcomings and presents new estimates of the distribution of national income since 1960. Our analysis of pretax income shows that top income shares are lower and have increased less since 1980 than other studies using tax data. In addition, increasing government transfers and tax progressivity have resulted in rising real incomes for all income groups and little change in aftertax top income shares.

Suggested Citation

  • Gerald Auten & David Splinter, 2024. "Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends," Journal of Political Economy, University of Chicago Press, vol. 132(7), pages 2179-2227.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/728741
    DOI: 10.1086/728741
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    Cited by:

    1. Lukas Riedel & Holger Stichnoth, 2024. "Government consumption in the DINA framework: allocation methods and consequences for post-tax income inequality," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(3), pages 736-779, June.
    2. Marc Fleurbaey & Domenico Moramarco & Vito Peragine, 2024. "Measuring inequality and welfare when some inequalities matter more than others," Working Papers ECARES 2024-15, ULB -- Universite Libre de Bruxelles.
    3. Burgstaller Lilith & Hassib Joshua & Benedikt Schmal W. & Weber Philipp, 2024. "Die Tücken der Ungleichheitsmessung: Rezeption einer aktuellen Debatte," Wirtschaftsdienst, Sciendo, vol. 104(7), pages 485-489.
    4. Marc Fleurbaey & Domenico Moramarco & Vito Peragine, "undated". "Measuring inequality and welfare when some inequalities matter more than others," Working Papers ecineq-, ECINEQ, Society for the Study of Economic Inequality.
    5. Gary Cornwall & Marina Gindelsky, 2024. "Nowcasting Distributional National Accounts for the United States: A Machine Learning Approach," BEA Papers 0130, Bureau of Economic Analysis.

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