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1 Alan Cole, Income Data Is a Poor Measure of Inequality 1 (2014)

handle is hein.taxfoundation/taxfaaqb0001 and id is 1 raw text is: TAX FOUNDATION SPECIAL REPORT Aug. 2014 No. 224 Income Data Is a Poor Measure of Inequality By Aln Cole Economist Key Findings * IRS income data is collected in order to raise revenue as directed by Congress, which means it is not necessarily well-suited for other purposes, like measuring equality in our society. * The average taxpayer's income changes dramatically throughout his lifetime; the average tax return for an 18- to 25-year-old shows about $15,000 in adjusted gross income where an average tax return for someone between ages 55 and 64 shows above $80,000. * College students, particularly, comprise a very large number of low-income taxpayers. * Incomes go considerably farther in some places than in others. Much of the narrative about rural states being poorer is mistaken. * Much capital income-especially capital income in tax-free middle-class retirement accounts-goes uncounted in income data, heavily distorting the measurement and making people appear poorer than they are. * Thomas Piketty's income inequality data leaves out $19 trillion of pension assets, which are yet to be attributed to any individual.

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