Earlier quoted context omitted.
And yet, the amount of redistribution that's happening has never been higher, far exceeding the era of "94% tax rate on the rich", never mind that nobody actually paid that rate because the tax code was full of exemptions at the time. https://www.economist.com/content-assets/images/20260221_IRC... https://www.economist.com/content-assets/images/20260221_IRC...
I don’t see how this graph shows that claim. It says it’s graphing the effect of welfare on income ratios between top 10% vs the bottom 50% then just has an arrow pointing down saying “Stronger redistribution” Where is the connection between the percentage being graphed and whatever their definition of “stronger redistribution” is? And I just realized the second graph includes capital gains for the fiscal income but…
The chart is supposed accompany an article, which explains what the metric is:
"""A simple measure of progressivity involves comparing the distribution of income both before and after tax. By this measure America redistributes about twice as much today as in the 1960s (see chart 1). Germany and Japan, the next biggest rich economies, also redistribute a lot more than they used to. So do Britain and Canada. Indeed by our estimate, seven in ten countries have more progressive tax-and-benefit systems than in 1990. The ones that have become less progressive tend to be dysfunctional (Belarus, Eritrea, Haiti) or were exceptionally redistributive to begin with (Norway, Sweden)."""
>And I just realized the second graph includes capital gains for the fiscal income but not for the after tax income? This just seems blatantly misleading with that detail being hidden in an asterisk.
1. If you read the original paper[1], they seem to be doing it for weird economics reasons:
"We then sequentially remove capital gains, which are not in national income"
I don't know enough about economics to dispute this, but given that they bothered to adjust for other factors like imputed rent and "corporation retained earnings", I'm willing to give them the benefit of the doubt unless there's convincing reason otherwise.
2. On page 16 they have an actual breakdown of all the adjustments, which lists the effect of removing capital gains at between 0.7% to 1.4%. In other words, not enough to change the conclusion.
[1] https://davidsplinter.com/AutenSplinter-Tax_Data_and_Inequal...