NY Times Errs
12 June 2007
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
The data and analytics of income "inequality" are sufficiently complex without David Leonhardt further confusing matters with a claim that is flat-out wrong. In "Larry Summers' Evolution" (June 10) he writes that "since 1979, the share of pretax income going to the top 1 percent of American households has risen by 7 percentage points, to 16 percent. Over the same span, the share of income going to the bottom 80 percent has fallen by 7 percentage points. It’s as if every household in that bottom 80 percent is writing a check for $7,000 every year and sending it to the top 1 percent."
Overlook the inaptness of Mr. Leonhardt's use of pretax income. (Because the top one percent of income earners pay a disproportionately large share of taxes, it is these high-income earners who are writing the big checks to the rest of us.)
The real problem is that Mr. Leonhardt mistakes a falling SHARE of income for falling income. It's simple arithmetic: Jones can simultaneously enjoy higher real income and see his income fall relative to Smith's.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
The data and analytics of income "inequality" are sufficiently complex without David Leonhardt further confusing matters with a claim that is flat-out wrong. In "Larry Summers' Evolution" (June 10) he writes that "since 1979, the share of pretax income going to the top 1 percent of American households has risen by 7 percentage points, to 16 percent. Over the same span, the share of income going to the bottom 80 percent has fallen by 7 percentage points. It’s as if every household in that bottom 80 percent is writing a check for $7,000 every year and sending it to the top 1 percent."
Overlook the inaptness of Mr. Leonhardt's use of pretax income. (Because the top one percent of income earners pay a disproportionately large share of taxes, it is these high-income earners who are writing the big checks to the rest of us.)
The real problem is that Mr. Leonhardt mistakes a falling SHARE of income for falling income. It's simple arithmetic: Jones can simultaneously enjoy higher real income and see his income fall relative to Smith's.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Monday January 28, 2008 at 10:40am