[jyl]

The income inequality chart referred to in the NYT article is based on actual income and taxes, not on marginal statutory rates. The economists went through 100 years of IRS records, must have been a huge task. So it includes the effect of deductions.

My view on this is pragmatic. I'm not all that emotional about the fairness of taxation policy or the rights and wrongs of income inequality. It isn't a moral issue to me. Like William Munny says in Unforgiven, "deserve's got nothing to do with it".

I do, however, think that societies that have a certain moderate level of income inequality (example might be, the USA in the 1950s) may be more stable, more harmonious, more sustainable growth, than societies with very little income inequality (examples might be early Castro Cuba, early Mao China?) or societies with very high income inequality (examples might be the Sun King's France).

It would be interesting to see work on that. I imagine economists have done it, but not sure it is getting reported in the popular press.