Phillip W. Magness

U.S. Economic & Political History

Something’s fishy with the Saez-Zucman tax stats

| October 27, 2019

Just over two weeks ago, Berkeley economists Emmanuel Saez and Gabriel Zucman approached the New York Times and Washington Post with an astonishing claim. According to new calculations performed by the pair, the wealthiest earners in the United States paid an overall effective tax rate in 2018 that was lower than the bottom half of […]

Different Measurements of Income Inequality – the interwar Wisconsin Example

| May 16, 2017

I have a new paper, co-written with Vincent Geloso, on the measurement of inequality in Wisconsin between 1919 and 1941. The discussion’s geography may initially seem obscure, but there’s a method to this investigation. In the early part of the 20th century Wisconsin had a stable state income tax system and, more importantly, generated high quality […]

Why Piketty-Saez yields an unreliable inequality estimate before World War II

| April 8, 2017

Next week I will be co-presenting a paper at the APEE conference on the reliability of historical estimates of income inequality in the United States. Our paper examines and offers a number of corrections to the widely cited income inequality time series by Thomas Piketty and Emmanuel Saez (2003). This series provides the baseline for […]

New evidence is undermining the ‘Inequality Scare’

| March 16, 2016

Almost two years have passed since the publication of Thomas Piketty’s Capital in the 21st Century, and the larger genre of economic research on the distribution of wealth has exploded since that time with complementary arguments being advanced by economists Emmanuel Saez and Gabriel Zucman, as well as economic popularizes on the left including Paul Krugman and […]

Piketty uses false history to promote Bernie’s tax plan

| February 20, 2016

Thomas Piketty is back in the news again with a strange new political op-ed espousing the presidential candidacy of Bernie Sanders. As with most things Piketty, his end game in backing Sanders comes down to higher taxes. Sanders has pledged to raise income tax rates on the upper brackets, so Piketty has accordingly attempted to […]

Quick thoughts on the new Piketty-Saez-Zucman Income Inequality Study at AEA

| January 6, 2016

The American Economic Association held its annual meeting in San Francisco this week. Consistent with the recent surge of interest in inequality research, one of the papers generating the most buzz was a new income inequality time series by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman. The paper itself has not been released yet, but its […]

Fed economists attempt to piketty their own U.S. inequality data

| December 26, 2015

Earlier this month the St. Louis Federal Reserve published a new briefing paper by economists William R. Emmons and Lowell B. Ricketts, in which they claimed to find recent evidence of the growing inequality trends predicted in Thomas Piketty’s Capital in the 21st Century. As asserted in the Fed paper: “Data from the Federal Reserve’s Survey of Consumer Finances […]

Saez-Zucman, the “Forbes 400,” and a new round of inequality data oddities

| October 18, 2015

When Thomas Piketty’s main inequality chart for the United States came under scrutiny from myself and others over the last year, he was largely non-responsive despite his mounting of a vigorous defense of other areas of his data. (My step-by-step deconstruction of the chart may be found here for reference. Similar criticisms figured prominently in my article […]

Hayek anticipated Piketty by 60 years

| May 9, 2015

This morning I came across the following passage from an article that F.A. Hayek published in 1956, entitled “Progressive Taxation Reconsidered.” Their content struck me as particularly prescient, as they directly anticipated both the punitive dimensions of Piketty’s wealth tax proposal, and the vulnerability of progressive income taxation to political capture. As Hayek writes: “With scales […]

Piketty goes cherry-picking for US Wealth Inequality

| January 2, 2015

One of the main critiques I’ve made of Thomas Piketty’s data, starting on this blog last May and appearing in my newly released paper with Robert Murphy on the subject, concerns his Figure 10.5, purporting to show the trend of wealth inequality in the United States. As I pointed out at the time, this chart suffers […]