Income redistribution through taxes and transfers continues to rise

That is the theme of my latest Bloomberg column, here is the introductory bit:

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.

And:

The best information indicates that transfer income is rising over time, one example being the increasing numbers of states accepting the expansion of Medicaid under the Affordable Care Act. Even following the Clinton-era welfare reforms, the real resources that US governments (at all levels) sent to the poor continued to increase. Welfare itself became more temporary, but aid for food and child care, among other needs, rose in real value.

In a recent study, 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.

A good rule for thumb for articles, policy papers, and tweets: if you see the word “gutted” used (but not as a reference to others), the output is likely bad.