Top Wealth in America: New Estimates and Implications for Taxing the Rich

Matthew Smith, Owen Zidar and Eric Zwick
Additional contact information
Matthew Smith: U.S. Treasury Department
Eric Zwick: University of Chicago and NBER

Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies.

Abstract: This paper uses administrative tax data to estimate top wealth in the United States.We build on the capitalization approach in Saez and Zucman (2016) while accounting for heterogeneity within asset classes when mapping income flows to wealth. Our approach reduces bias in wealth estimates because wealth and rates of return are cor-related. We find that the top 0.1% share of wealth increased from 7% to 14% from 1978 to 2016. While this rise is half as large as prior estimates, wealth is very concentrated: the top 1% holds nearly as much wealth as the bottom 90%. However, the "P90-99" class holds more wealth than either group after accounting for heterogeneity.Private business and public equity wealth are the primary sources of wealth at the top, and pension and housing wealth account for almost all wealth of the bottom 90%. Our approach substantially reduces estimates of mechanical wealth tax revenue and top capital income in distributional national accounts, which depend on well-measured estimates of top wealth. From 1980 to 2014, capital income accounts for 2.4 out of 8.1 percentage points of the rise of the top 1% income share.

Keywords: United; States (search for similar items in EconPapers)
JEL-codes: D31 H22 H23 H24 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-acc and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

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Related works:
Working Paper: Top Wealth in America: New Estimates and Implications for Taxing the Rich (2021)
Working Paper: Top Wealth in America: New Estimates and Implications for Taxing the Rich (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:pri:cepsud:264

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