Simon Torracinta in Dissent:
An academic journal article on the technicalities of tax data is not usually cause for much excitement. Yet at the end of last year, one such publication in the Journal of Political Economy set #EconTwitter afire with debate, and prompted a full column in the Economist. The paper, by Gerald Auten and David Splinter, took aim at the famous studies on rising inequality conducted by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman. If one employs different assumptions, Auten and Splinter argued, post-tax income inequality in the United States appears not to have risen much since the 1960s. While Piketty and his collaborators systematically challenged the findings, their detractors were quick to the draw. “The Piketty and Saez work is careless and politically motivated,” sniped James Heckman, a Nobel-winning Chicago School econometrician.
Whether it has risen in recent decades or merely plateaued, income and wealth inequality in the United States remains staggering. But the recent controversy illustrates the high stakes of empirical research on the subject, which burst into public view in 2014 with the publication of Piketty’s Capital in the Twenty-First Century. While it is hard to imagine the Biden administration’s announcement of a “new Washington consensus” centered on the “challenge of inequality” and its push for a global minimum tax without the shock wave of the 2016 election, Piketty’s high-profile work supplied a ready explanation for what had gone wrong.
The economist Branko Milanovic made his own major contribution to the study of inequality in 2016 with his breakout Global Inequality.
More here.