NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Recent Trends in U.S. Top Income Shares in Tax Record Data Using More Comprehensive Measures of Income Including Accrued Capital Gains

Jeff Larrimore, Richard V. Burkhauser, Gerald Auten, Philip Armour

NBER Working Paper No. 23007
Issued in December 2016, Revised in June 2017
NBER Program(s):Public Economics

Access to IRS personal income tax records improves researchers’ ability to track U.S. income and inequality, especially at the very top of the distribution (Piketty and Saez 2003). However, rather than following standard Haig-Simons income definitions, tax form income measures were designed to implement the Internal Revenue Code. Using IRS tax record data since 1989 statistically matched to Survey of Consumer Finances and Census data for income sources not available in tax data, we explore the robustness of levels and trends in inequality using the top income literature’s tax return market income definition (Saez 2016) compared to more comprehensive income measures. We find that focusing solely on market income misses the important redistributive effects of government taxes and transfers. In addition, we find that the use of taxable realized capital gains changes the level and trend in top incomes relative to an accrued capital gains measure that is more consistent with Haig-Simons income definitions.

download in pdf format
   (742 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23007

Users who downloaded this paper also downloaded* these:
Armour, Burkhauser, and Larrimore w19110 Levels and Trends in United States Income and Its Distribution A Crosswalk from Market Income Towards a Comprehensive Haig-Simons Income Approach
Hubmer, Krusell, and Smith w23011 The Historical Evolution of the Wealth Distribution: A Quantitative-Theoretic Investigation
Piketty, Saez, and Zucman w22945 Distributional National Accounts: Methods and Estimates for the United States
Piketty, Yang, and Zucman w23368 Capital Accumulation, Private Property and Rising Inequality in China, 1978-2015
Chetty and Hendren w23002 The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us