About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 William McBride, Thomas Piketty's False Depiction of Wealth in America 1 (2014)

handle is hein.taxfoundation/taxfaarb0001 and id is 1 raw text is: TAX W FOUNDATION Thomas Piketty's False Depiction of Wealth in America July 2014 By William McBride No. 223 Chief Economist Executive Summary In his book, Capital in the 21st Century, Thomas Piketty portrays the rich as heirs with privileged access to high rates of return, stating it is almost inevitable that inherited wealth will dominate wealth amassed from a lifetime's labor. He points to the Forbes wealth rankings for support. In fact, the Forbes 400-an annual ranking of the richest Americans-indicates wealth is much more fleeting than Piketty suggests and is characterized more by entrepreneurship than by inheritance. Key Findings * Of the Forbes 400 from 1987, 327 people have dropped off the list. Of the remaining 73 people, those with the highest annual rates of return are generally self-made entrepreneurs and investors-not heirs-with an average annual real rate of return of 5.6 percent over the last 26 years. * The rate of return for the Forbes 400 as a whole, 2.4 percent, is roughly equal to Piketty's estimated returns for the entire population. * Wealth today is largely generated by entrepreneurial skill, with the number of entrepreneurs on the Forbes 400 list rising from 40 percent in 1982 to 69 percent in 2011. * The role of inheritance has diminished over the last generation; the share of the Forbes 400 that grew up wealthy has fallen from 60 percent in 1982 to 32 percent today. * As with individuals, the wealth of corporations has been highly dynamic over the last 30 years; turnover in the Dow Jones Industrial Average has increased in recent decades, with only one corporation (General Electric) remaining on the Dow Jones for more than 100 years.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most