This is a match of economists that could change the face of America. To my left, a trio of Frenchies – Thomas Piketty, Emmanuel Saez and Gabriel Zucman – who became famous thanks to their work demonstrating the colossal enrichment of the richest 1% across the Atlantic.
On my right, Gerald Auten and David Splinter, two tax specialists attached to the US Treasury and Congress, who formally contest this thesis. The subject is hot, as the rise in inequalities fuels the political debate in the United States and should still be reflected in the next presidential campaign.
Read alsoInequalities: the work of Zucman, Piketty and Saez is called into question
The two Americans launched hostilities at the beginning of November. In an article published in the very prestigious journal Journal of Political Economythey argue that the conclusions of the three French people “give a distorted vision of the levels and trends in inequality”.
According to them, it is wrong to assume that income which does not appear in tax declarations – i.e. 30 to 40% of national income – is distributed within the population in a manner equivalent to declared income. to the taxman. The two authors criticize Piketty, Saez and Zucman for poorly taking into account untaxed social benefits, the effects of the reduction in taxation under Reagan which would have led the richest to declare their income more or the reduction in the number of marriages among the poorest 50% which mechanically reduces wealth per tax household.
In total, the two economists estimate that the 1% of the richest Americans capture 9% of the entire national income after taxes and transfers, or as much as in 1962. When their colleagues put this share at 15%, an increase of 50% for sixty years…
The importance of assumptions
The French responded quickly. On December 14, Gabriel Zucman published an 11-page note on X (formerly Twitter), co-signed with Thomas Piketty and Emmanuel Saez, to dismantle the arguments of their critics.
From the outset, they recall that a number of data, apart from tax declarations alone, confirm the growing concentration of wealth at the top: salaries listed by social security funds, CEO remuneration, inheritance declarations, ranking of wealth of Forbes or Challenges, etc. Then, they mock the postulate according to which income not declared for tax purposes would be distributed much more equally than income declared to the tax authorities.
“The richest 1% earn about 55% of taxed business income, but Auten and Splinter assume that untaxed business income is distributed very evenly,” says Gabriel Zucman. Without these hypotheses being ever explicitly discussed. »
Read alsoHow we should tax our great fortunes
The figures put forward on the distribution of untaxed capital income, which would mean “a massive equalization of capital in the United States since the 1960s”, seem totally fanciful to them. Only one point reconciles them: the importance of hypotheses in economic research.
2023-12-24 04:03:50
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