Some days back I offered an interpretation of the motives and political economy behind the adoption of the 16th Amendment, noting at the time that it also caused extreme constitutional havoc by altering the relationship between the tariff system and the generation of federal tax revenue. While it is certainly possible to read this as a statement […]
The Constitutional Havoc of the Income Tax Amendment Read More »
The other day I began scrutinizing Thomas Piketty’s data on capital to national income ratios and particularly the twice-published Figure 5.8/12.4. This graph provides an important piece of evidence for Piketty’s theoretical argument in Capital in the 21st Century, and particularly his contention that “a country that saves a lot and grows slowly will over the long run accumulate an enormous stock
The post that follows is a bit more technical than my other posts on the data problems with Thomas Piketty’s Capital in the 21st Century. It also involves a more complex piece of his data, though one with significant implications to his general theory about a hypothesized inherent tendency of capital returns to outpace other earnings. With that in
Data Problems with Piketty’s Capital/Income Ratios Read More »
In the past few days Thomas Piketty and a number of his less scrupulous defenders have taken to declaring the data dispute around Capital in the 21st Century a settled matter since the publication of Piketty’s retort to Chris Giles of the Financial Times. I submit that it is anything but settled, and would draw your attention to five specific
5 remaining problems for Thomas Piketty in the wake of the FT controversy Read More »
Robert Murphy has an excellent post up today following a conversation about the new Saez-Zucman (2014) “study” of US wealth inequality that Piketty is currently trumpeting (see p. 7) as something of a vindication of his highly problematic and as-of-yet still unexplained Figure 10.5. The first takeaway is that Saez-Zucman (2014) isn’t really a study –
About that new “study” that supposedly vindicates Piketty… Read More »
The federal revenue situation of the late 19th century United States presents a somewhat case study in constitutional political economy, owing to a fairly restrictive constitutional restraint on the means of raising revenue for the federal government. The U.S. Constitution provided Congress with the “Power To lay and collect Taxes, Duties, Imposts and Excises” as its primary means of taxation,
Earlier today Thomas Piketty released a 10 page supplemental appendix to his book Capital and the 21st Century, responding to the raging controversy around his data. The appendix was styled as a response to the Financial Times investigation, although it is relevant to issues that have also been raised elsewhere including on this blog. My initial take is that
This is what happens to Piketty’s Figure 10.5 if you remove the problematic 1970s data point: Note that I am not endorsing the accuracy of the result, which is still plagued by other questionable data techniques. It also seems reasonable to include an appropriate accounting for the 1970s, assuming one exists (I’m simply saying that
The original post that started my ongoing examination of Thomas Piketty’s data specifically examined a series of irregularities on Figure 10.5, one of his key graphs to sustain his thesis of a trend of increasing US wealth disparity since the 1970s. As I noted, Piketty seems to be using a decennial averaging technique to clean
Addendum: Examining Piketty’s data sources for US Wealth Inequality Read More »
I mentioned in my previous post that Thomas Piketty really likes building decennial averages out of annual time series data. As part of the ongoing examination of his historical stats, let’s take a closer look at another one of his graphs, Figure 11.12 covering wealth transfers by inheritance as a percentage of national income across three European