TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Tax policy doesn’t explain most of the rise in income inequality since 1979:

So, would we have avoided the increase in inequality over the period in question? Not even remotely. The 1979 scenario lines shows inequality rising a bit more slowly than what actually happened, but the underlying pattern is the same.

“Roughly 30 percent of the rise in post-tax, post-transfer inequality between 1979 and 2007 can be attributed to changes in the redistributive nature of tax and budget policy,” Fieldhouse concludes. “It is still the case, however, that shifts in the market distribution of income are the primary factors driving the rise in inequality.”

That, combined with rising inequality throughout the developed world over the period, suggests that it is mostly a result of larger, global trends.