Should-Read: Fatih Guvenen and Greg Kaplan: Top Income Inequality in the 21st Century: Some Cautionary Notes

Should-Read: Fatih Guvenen and Greg Kaplan: Top Income Inequality in the 21st Century: Some Cautionary Notes: “IRS and SSA data reveal diverging patterns in top income shares… http://papers.nber.org/w23321.pdf

…due to the increasing importance of income accruing to pass-through entities (partnerships and S-corporations)… included in the IRS measure of total income but not in either the IRS or SSA measure of labor income…. The bulk of this growth… was concentrated at the very top… above the 99.99th percentile, a group that contains only about 12,000 households. The share of incomes above the 99th percentile (around $372,000 in 2012) but below the 99.99th percentile (around $7.2 million in 2012) has barely changed in the last two decades…