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How Invisible Capital Gains Drive Extreme Wealth Concentration: Evidence from Balance-Sheet-Complete Haig-Simons Accounting

Roth, Steve and Bezemer, Dirk (2024): How Invisible Capital Gains Drive Extreme Wealth Concentration: Evidence from Balance-Sheet-Complete Haig-Simons Accounting.

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Abstract

Researchers of income, wealth and inequality have long called for data on total “Haig-Simons” income, which includes accrued capital gains. We integrate NIPA income and saving measures with Integrated Macroeconomic Accounts (IMAs) data to derive an open-access, balance-sheet-complete data set of 1960-2023 “Total U.S. Haig-Simons Household Income Accounts” (THIAs) for U.S. households, with distributional estimates covering 2000-2023. We highlight five trends in this data that all contribute to the increased U.S. wealth concentration since the late 1970s. For instance, 86% of Haig-Simons saving since 2000 accrued to the top 20% of households (by income), driven heavily by asset-price increases, plus top households’ lower and declining propensities to consume.

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