Analysis of a massive trove of data – much of it leaked from tax havens – suggests that inequality levels across the world should be revised upwards dramatically
The statistics on inequality – those used, for instance, in Thomas Piketty’s bestseller, Capital in the Twenty-First Century – only include the income and wealth the taxman sees. So how high is inequality when also accounting for what he doesn’t see? Recent leaks from tax havens suggest the gap between the rich and the rest is even wider than we think.
Tax records are invaluable for the study of economic inequality. They contain detailed information about the income (and, in some countries, wealth) of taxpayers. Much of this information comes directly from employers and banks, and is therefore reliable. And because tax records exist as far back as the early 20th century, they can be used to shed light on the long-term evolution of inequality.