Noah Smith at Noahpinion:
Most economic debates are about income, not wealth. When we talk about income taxes, or welfare benefits, or labor’s share of national income, we’re talking about the amount of goods and services that get created every year, and how those goods and services get allocated among the various people in a society. But in the 2010s, we saw a lot of debate about wealth instead — wealth taxes, wealth inequality, and so on.
I always felt that these debates were a bit of a distraction. That’s partly because — for reasons I’ll explain in a bit — I think income is a lot more important than wealth. It’s also because from a policy perspective, dealing with income is a lot easier than dealing with wealth. But the biggest reason is that I think that wealth is a lot harder for regular people to understand than income.
In general, regular people’s intuitive “folk” understanding of income is pretty close to the way economists think about it.
More here.
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