A new OECD paper by Stephen Matthews looks at tax-return data from several countries, much of it going back many decades, to characterize trends in top incomes. This growing data set is the result of a fascinating research project led by Tony Atkinson.
For most of the OECD economies considered, the income share of the top 1% fell over the course of the 20th century. While for some countries (most of Continental Europe), the trend looks like a long-term decline with a little uptick in the last few years, for others — the US, the UK, Australia, basically all the English-speaking countries — the curve over time looks like a U, with the top 1% earning fully as much of national income as they did back in the go-go twenties. (Click here for a picture of the latter group of countries:
There is also interesting information about the kinds of jobs these folks hold, and the sources of their income. Matthews stresses that most of the income of the 1% is not from capital gains, but instead employment and business income. Nevertheless, capital gains income plays an important role in growing polarization.