…gini in a bottle?…Posted: 2014-01-28
…nothing like seeing the same, as well as other data and information better presented…
As the ‘mock shock’ of some US politicians at the declining fortunes of USans continues to amuse, we can have a look at more serious matters. Over at fdl, we have this from DS Wright, Rich Paying Smaller Share Of Taxes Under Obama. And the table tells the tale from 2007 when the innocent ricachos saw their taxes peak in their highest income categories for that period. For them, by the year 2011 ‘Happy Days are here again‘ would be the joyous refrain. [Some taxes would subsequently go up, but not retroactively.]
We go to already familiar territory of the Gini coefficient of inequality, as the names of Saez and Piketty should evoke. This time we yield to the expertise of Prof Mark Thoma with his, How do we know income inequality is getting worse?. As ‘take away’, we have,
Despite these problems with the Gini coefficient, it is a useful and popular measure that summarizes the degree of income inequality with a single number. But it is best used in conjunction with other approaches such as the graphical technique outlined above that give more detailed information on how the distribution of income among various groups is changing over time.
For example, the Gini for the U.S. tells us that inequality has been rising over the last several decades, and the graphical approach that looks at various slices of the income distribution over time allows us to determine that the change in inequality is mainly due to changes in income for the richest 0.1 percent of Americans. That’s valuable information for anyone trying to understand and address the growing inequality problem.
[Bold added for emphasis]
Yes, that Gini has been long out of the bottle. And here we see the value of a hammer or…