Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data *

2016/02/16 by Emmanuel Saez, Gabriel Zucman · 1 voice · 1,576 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Adjusted gross income #Capitalization #Distribution (mathematics) #Economic inequality #Economics #Finance #Financial Literacy, Pension, Retirement Analysis #Fiscal Policy and Economic Growth #Gross income #Housing Market and Economics #Income tax #Inequality #Labour economics #National wealth #Public economics #Real estate #State income tax #Tax reform #Taxable income #Wealth elasticity of demand

paper · pdf · doi:10.1093/qje/qjw004

published in The Quarterly Journal of Economics 131(2), 519-578 (Oxford University Press)

openalex publication_date 2016/02/16 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05

Abstract

Abstract This paper combines income tax returns with macroeconomic household balance sheets to estimate the distribution of wealth in the United States since 1913. We estimate wealth by capitalizing the incomes reported by individual taxpayers, accounting for assets that do not generate taxable income. We successfully test our capitalization method in three micro datasets where we can observe both income and wealth: the Survey of Consumer Finance, linked estate and income tax returns, and foundations’ tax records. We find that wealth concentration was high in the beginning of the twentieth century, fell from 1929 to 1978, and has continuously increased since then. The top 0.1% wealth share has risen from 7% in 1978 to 22% in 2012, a level almost as high as in 1929. Top wealth-holders are younger today than in the 1960s and earn a higher fraction of the economy’s labor income. The bottom 90% wealth share first increased up to the mid-1980s and then steadily declined. The increase in wealth inequality in recent decades is due to the upsurge of top incomes combined with an increase in saving rate inequality. We explain how our findings can be reconciled with Survey of Consumer Finances and estate tax data.

Citations

• Top Wealth Shares in the United States, 1916–2000: Evidence from Estate Tax Returns
• Top Incomes in the Long Run of History
• Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010 *

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Discussions

• Please make a video about key available evidence for increasing wealth concentration (beyond your points on COVID government borrowing or the Duke of Westminster), perhaps along the lines of doi.org/1 [bsky, 1 points, 0 comments]

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