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And as long ago as the 18th century Scots and English rich elites willingly paid higher taxes than was the case in the 17th century. Why? Because they perceived that they received substantial government services for the pounds they paid in taxes. Arthur Herman (2001), How the Scots Invented the Modern World , New York, NY: Three Rivers Press, p.58-59.

Appendix chapter 4

Piketty and income inequality: a closer look

There are at least three reasons that reduce the credibility of Piketty’s results. First, the results pertain to the evolution of pre-tax income over time. That is, the author does not take into account the effects of existing taxes, direct transfers from government to individuals (welfare payments, social security payments). The use of pre-tax income as the measure of inequality is difficult to understand in a book intended to be policy relevant, particularly since the data on post-tax, post-transfer income (at least in the U.S.) is readily available. This is a significant issue given the degree of progressivity of effective rates in the U.S. federal tax and the pro-poor effects of government transfer payments.

First consider federal taxes. Table 4-1 shows that average tax rates paid by the top decile of the income distribution are nearly 12 times that of the lowest quintile. The share of total taxes paid by the top 1% is___ times that of the lowest decile.

In an era of high, and probably growing, pre-tax inequality of income, it should not be surprising that the share of the one percent most highly paid Americans has grown sharply: in 1979 the top 1% paid 18% of total income tax. By 2013, the share of the top 1% had grown to 46%, while 40% of households paid no income tax at all ( Economist, September 20, 2014, p.13). These figures suggest that, at the very least, the tax system has had some moderating effects in reducing post-tax income inequality.

*Average of 90th to 99th percentiles

Source: Congressional Budget Office, “The Distribution of Household Income and Federal Taxes, 2011”. Washington, DC, 2014, p.16.
Table 4-1
Average Federal Tax Rates, by Before Income Tax Group, 2013 Projected
(Under 2013 Tax Rules)
2013 Multiple of Top 1% to Lowest Quintil
Quintiles
Lowest Quintile 2.9% 11.5
Second Quintile 8.0% 4.2
Middle Quintile 12.3% 2.7
Fourth Quintile 16.4% 2.0
Highest Quintile 25.5% 1.3
Top Percentile
Top Decile* 23.8% 1.4
Top 1% 33.3%

A comprehensive report from the Congressional Budget Office in 2014 presents an exhaustive account of the effects of taxes and transfers in the United States from 1980 to 2010, closely corresponding to the period 1970-2010, a period of increasing income inequality reported by Piketty.

This study concludes that, when taxes and transfers are taken into account, income inequality has increased, but not as sharply as one would conclude from the Piketty results According to the CBO study, the Gini Coefficient in the U.S. increased from 0.48 to 0.59 from 1980-2010, if taxes and transfers are omitted in the definition of income.

Taking into account taxes and transfers, the Gini also increased over the same period, but from 0.37 to 0.44, an increase of 19%, compared to an increase of 23% when taxes and transfers are not included in income. This study helps confirm that income inequality in the U.S. has increased since 1980, but not by as much as would be indicated in studies utilizing before-tax income, including that of Piketty.

Questions & Answers

where we get a research paper on Nano chemistry....?
Maira Reply
what are the products of Nano chemistry?
Maira Reply
There are lots of products of nano chemistry... Like nano coatings.....carbon fiber.. And lots of others..
learn
Even nanotechnology is pretty much all about chemistry... Its the chemistry on quantum or atomic level
learn
Google
da
no nanotechnology is also a part of physics and maths it requires angle formulas and some pressure regarding concepts
Bhagvanji
Preparation and Applications of Nanomaterial for Drug Delivery
Hafiz Reply
revolt
da
Application of nanotechnology in medicine
what is variations in raman spectra for nanomaterials
Jyoti Reply
I only see partial conversation and what's the question here!
Crow Reply
what about nanotechnology for water purification
RAW Reply
please someone correct me if I'm wrong but I think one can use nanoparticles, specially silver nanoparticles for water treatment.
Damian
yes that's correct
Professor
I think
Professor
Nasa has use it in the 60's, copper as water purification in the moon travel.
Alexandre
nanocopper obvius
Alexandre
what is the stm
Brian Reply
is there industrial application of fullrenes. What is the method to prepare fullrene on large scale.?
Rafiq
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
Damian
How we are making nano material?
LITNING Reply
what is a peer
LITNING Reply
What is meant by 'nano scale'?
LITNING Reply
What is STMs full form?
LITNING
scanning tunneling microscope
Sahil
how nano science is used for hydrophobicity
Santosh
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
Rafiq
what is differents between GO and RGO?
Mahi
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
Rafiq
if virus is killing to make ARTIFICIAL DNA OF GRAPHENE FOR KILLED THE VIRUS .THIS IS OUR ASSUMPTION
Anam
analytical skills graphene is prepared to kill any type viruses .
Anam
Any one who tell me about Preparation and application of Nanomaterial for drug Delivery
Hafiz
what is Nano technology ?
Bob Reply
write examples of Nano molecule?
Bob
The nanotechnology is as new science, to scale nanometric
brayan
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Damian
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
Renato
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
?
Kyle
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
Adin
why?
Adin
what school?
Kyle
biomolecules are e building blocks of every organics and inorganic materials.
Joe
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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