Bloomberg Op-Ed: America Spreads the Wealth — and Redistributes It, Too, by Tyler Cowen (George Mason; Google Scholar):
I have news for you: The United States is becoming more redistributionist. Whether you like it or not.
The broader historical trends show that the US tax-and-transfer system is getting more progressive, including in recent years. And the US government is increasingly redistributing wealth to the bottom half of the income distribution.
This portrait belies the common view that the US doesn’t have a “real” welfare state, at least as compared to, say, the Nordic countries. Writers from left-leaning perspectives frequently claim that the US has “gutted” its welfare programs. …
The more accurate picture, less exciting though it may be, is that there is income redistribution in the US, either because voters think it is the right thing to do or because they hope to gain themselves from such a system. And as the US increases its wealth, it is redistributing more of it. …
In a recent study [How Progressive is the U.S. Tax System?], Thomas Coleman and David A. Weisbach of the University of Chicago focus on research of tax-and-transfer progressivity and establish some ground rules for judging its reliability: It should measure income comprehensively; look at both taxes and transfers; examine the issue over decades; and make their data available. Under these criteria, only three studies qualify. After scrutinizing that research, Coleman and Weisbach conclude:
Methodological choices produce some differences in the size of their estimates and the size of the trends, but the central story in all these studies is the same: the dominant change in the tax and transfer system over the past half-century has been an increase in transfers to the bottom. … All three studies show that the tax and transfer system has become more progressive and more redistributive.
If you are wondering: Yes, among those three studies are the data work of the academics Thomas Piketty, Emmanuel Saez and Gabriel Zucman [Distributional National Accounts: Methods and Estimates for the United States (2018)], typically considered a left-leaning source, as well as the work of Gerald Auten and David Splinter [Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends], both of whom work for the US government and whose work has been embraced by some conservative and libertarian commentators. …
Cliches about the US are easy to come by. While conservatives like to suggest that income redistribution is by its very nature anti-American, progressives say that America is uniquely cruel in its rejection of the welfare state. Neither narrative is quite correct. As America gets more wealthy, the data show, it is redistributing more of its wealth.
