Sylvia Nasar (July 20, 1992): The Rich Get Richer, but the Question Is by How Much https://www.nytimes.com/1992/07/20/business/the-rich-get-richer-but-the-question-is-by-how-much.html?searchResultPosition=239: "Trying to challenge the widespread impression that the rich got a wildly disproportionate share of the gains from the Reagan economic boom, the Treasury has been quietly circulating a 'primer' on income distribution to journalists and economists. The 24-page document, prepared by R. Glenn Hubbard, Deputy Assistant Secretary for Tax Analysis, asserts that the richest 1 percent of American taxpayers reaped only 11.3 percent of the income gains in the 1980's.... But experts in the field who reviewed the Treasury's calculation were highly critical, saying that the Treasury economist had fallen into a well-known statistical trap that all but guaranteed that the gains for the top group of income earners would appear modest. 'It's not a meaningful calculation', said Lawrence F. Katz, an economist at Harvard University.... Its calculation contrasts sharply with one by an economist at the Massachusetts Institute of Technology, Paul R. Krugman, that the richest 1 percent of American families reaped 70 percent of the growth in average family incomes from 1977 to 1988. Professor Krugman's data are now enshrined in Gov. Bill Clinton's economic program as the Democratic Presidential candidate and dismissed by the Treasury as a 'meaningless statistical artifact'...

...'It makes a big difference how you define the rich, whether you define them at the beginning or end of the period', said Isabel V. Sawhill, an economist at the Urban Institute, a research organization.... Sawhill calculated how the income of the top 20 percent of income earners changed between 1976 and 1986. 'If you define the top quintile as people who had high incomes in 1977 and follow them for the next decade, you find their incomes declined by 11 percent', she said. 'But if you define them as people who had high incomes in 1986, and compare them to where they were in 1977, you find their incomes went up by 65 percent'..... Those at the top in one year have only one place to go in subsequent years if they move out of the group: down.... 'I would ask Treasury to redo their calculation on the top 1 percent defined by 1988 income', said Joel B. Slemrod, an economist at the University of Michigan. 'I'm pretty sure the numbers would change quite a bit'. A reporter had, in fact, asked Mr. Hubbard several times to make such a calculation, but he refused on the ground that the results would be uninteresting....

'The gains of the 1980's were incredibly unevenly distributed', said Mark Condon, a researcher at the Urban Institute who was co-author with Ms. Sawhill of a recent study of income mobility. 'That's what the Treasury is trying to refute," he added, "and that's what the Krugman calculation gets across pretty well.'


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