The Truth About Income Inequality

11/3/19
 
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By Phil Gramm and John F. Early,

from The Wall Street Journal,
11/3/19:

The census fails to account for taxes and most welfare payments, painting a distorted picture.

Never in American history has the debate over income inequality so dominated the public square, with Democratic presidential candidates and congressional leaders calling for massive tax increases and federal expenditures to redistribute the nation’s income. Unfortunately, official measures of income inequality, the numbers being debated, are profoundly distorted by what the Census Bureau chooses to count as household income.

In all, leaving out taxes and most transfers overstates inequality by more than 300%, as measured by the ratio of the top quintile’s income to the bottom quintile’s.

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