Hostname: page-component-cd9895bd7-7cvxr Total loading time: 0 Render date: 2024-12-19T08:45:13.467Z Has data issue: false hasContentIssue false
  • English
  • Français

Taxes and the revaluation of household wealth

Published online by Cambridge University Press:  26 May 2021

Edward N. Wolff
Edward N. Wolff*
Affiliation:
Department of Economics, New York University, New York, NY, USA National Bureau of Economic Research, Cambridge, MA, USA
*
Corresponding author. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

I compare pre-tax and post-tax wealth levels and trends after netting out implicit taxes on tax-deferred assets and accrued capital gains. The analysis covers 1983–2016 for net worth (NW) and augmented wealth (AW), which includes pension and Social Security wealth. Netting out implicit taxes substantially reduces growth in mean and median NW and AW. However, the upward trajectory in NW and AW inequality is basically unchanged from using post-tax values. I also introduce bequest wealth, the value of the estate including death benefits. It is notably more equal than NW and has grown faster over time.

Keywords

Estate taxeshousehold wealthincome taxesinequalitypensionsSocial SecurityD31H31J1
Type
Article
Information
Journal of Pension Economics & Finance , Volume 21 , Issue 4 , October 2022 , pp. 537 - 564
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Argento, R and Moore, KB (2013). Evaluating Tax Data Generated Using the Survey of Consumer Finances and TAXSIM. Papers and Proceedings of the 2013 Joint Statistical Meetings.Google Scholar
Beshears, J, Choi, JJ, Laibson, D and Ramnath, S (2019). Trends in Retirement Income Adequacy: Evidence from IRS Data, Retirement and Disability Research Center NB19-06, August.Google Scholar
Bricker, J, Henriques, A, Krimmel, J and Sabelhaus, J (2015). The Increase in Wealth Concentration, 1989–2013. Federal Reserve FEDS Notes.CrossRefGoogle Scholar
Bricker, J, Krimmel, J, Henriques, A and Sabelhaus, J (2016) Measuring income and wealth at the top using administrative and survey data. Brookings Papers on Economic Activity Spring, 261–312.CrossRefGoogle Scholar
Bricker, J, Hansen, P and Volz, AH (2019) Wealth concentration in the US after augmenting the upper tail of the survey of consumer finances. Economics Letters 184, 108659.CrossRefGoogle Scholar
Chen, A, Munnell, AH and Sanzenbacher, GT (2018). How Much Income Do Retirees Actually Have? Evaluating the Evidence from Five National Datasets, CRR WP 2018-14, November.CrossRefGoogle Scholar
Feenberg, D and Coutts, E (1993) An introduction to the TAXSIM model. Journal of Policy Analysis and Management 12(1), 189–194.CrossRefGoogle Scholar
Looney, A and Moore, KB (2016) Changes in the distribution of after-tax wealth: has income tax policy increased wealth inequality? Fiscal Studies 37, 77–104.CrossRefGoogle Scholar
Pfeffer, FT, Danziger, SH and Schoeni, RF (2013) Wealth disparities before and after the great recession. Annals of the American Academy of Political and Social Science 650(1), 98–123.CrossRefGoogle ScholarPubMed
Poterba, JM (2004) Valuing assets in retirement savings accounts. National Tax Journal 57(2, Part 2), 489–512.CrossRefGoogle Scholar
Saez, E and Zucman, G (2016) Wealth inequality in the United States since 1913: evidence from capitalized income tax data. Quarterly Journal of Economics 131(2), 519–578.CrossRefGoogle Scholar
Smith, M, Zidar, O and Zwick, E (2019). Top Wealth in the United States: New Estimates and Implications for Taxing the Rich. Mimeo.Google Scholar
Weller, CE (2010) Did retirees save enough to compensate for the increase in individual risk exposure? Journal of Aging & Social Policy 22(2), 152–71.CrossRefGoogle ScholarPubMed
Wolff, EN (2007) The adequacy of retirement resources among the soon-to-retire, 1983–2001. In Papadimitriou, DB (ed.), Government Spending on the Elderly. Houndsmill, Hampshire, UK: Palgrave Macmillan, pp. 315–342.CrossRefGoogle Scholar
Wolff, EN (2011) The Transformation of the American Pension System: Was It Beneficial for Workers? Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.Google Scholar
Wolff, EN (2017). Household Wealth trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered? NBER WP 24085.CrossRefGoogle Scholar