The Tax Foundation’s Alan Cole in a recent report found that the IRS income data unreliable as a measure of inequality.The conclusions of the report were:
IRS income data is collected in order to raise revenue as directed by
Congress, which means it is not necessarily well-suited for other purposes,
like measuring equality in our society.
The average taxpayer’s income changes dramatically throughout his
lifetime; the average tax return for an 18- to 25-year-old shows about
$15,000 in adjusted gross income where an average tax return for
someone between ages 55 and 64 shows above $80,000.
College students, particularly, comprise a very large number of low-income
narrative about rural states being poorer is mistaken.
retirement accounts—goes uncounted in income data, heavily distorting
the measurement and making people appear poorer than they are.
assets, which are yet to be attributed to any individual.