….In a recent paper posted by the National Bureau of Economic Research, he and coauthors Alan Auerbach of UC Berkeley and Darryl Koehler of Economic Security Planning say that for all their importance, inequality studies producing those numbers “fail an important test: none measures inequality in living standards, which should be the ultimate concern when assessing economic fairness. ”
If you look at the effects of government fiscal policy—taxes that people pay, especially the rich, and transfer payments (such as public assistance, Social Security, and Medicare) they receive, especially the needy—those have a dramatic effect on lessening inequality in a key area: expected future lifetime spending by households, Kotlikoff argues…..
U.S. Inequality, Fiscal Progressivity, and Work Disincentives: An Intragenerational Accounting
Source: Alan J. Auerbach, Laurence J. Kotlikoff, Darryl R. Koehler, National Bureau of Economic Research, NBER Working Paper No. 22032, February 2016