More than anything else, their work shows that the top earners in the United States have taken a bigger and bigger share of overall income over the last three decades,...
But both also express bewilderment over the current conversation about whether the wealthy, who have taken most of America’s income gains over the last 30 years, should be paying higher taxes.
They figured out the benchmark for various income levels — the top 10 percent, top 1 percent and top 0.1 percent of earners, for instance — and calculated what share of income each group took each year.
But then inequality started increasing again, with the top 1 percent of earners drawing a bigger and bigger share of overall income.
Data that the two economists released in March showed that the top 1 percent of earners got nearly every dollar of the income gains eked out in the first full year of the recovery. In 2010, the top 10 percent of earners took about half of overall income.
So, what is that -- 4 takes, 1 draw, and 1 got? Income isn't taken by individuals away from some collective pile of "overall income." It is produced by individuals working together under voluntary arrangements. Absent coercion or government largesse, income is earned in ways that don't deserve to be derided in this way.
Her distorted language detracts from an important issue. Tax rates need to go up primarily because we have a deficit problem, not a fairness problem. They have to go up even though we have a weak economy, because we have a deficit problem. In the process of raising tax rates, we should obviously consider ability to pay, which will generate larger tax increases on higher incomes. The fine work of Piketty and Saez shows us just how much room there is in different parts of the income distribution, relative to historical distributions, to raise that revenue.