Raising income taxes won't fix wealth inequality

To distill the finding, a team of researchers based out of Tel-Aviv University first developed an algorithm to model wealth inequality in the United States between 1930 and 2010. Primarily based on income from wages, income from wealth (profits, rents, dividends, etc.), and changes in capital value (property, shares, etc.) the resulting model correlated closely (p=.96) with historical data on wealth inequality.

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The researchers then used their model to predict the future. What would happen, they wondered, if income inequality was varied? In their model, income inequality was tied to a metric called the Gini index, a statistical measure of inequality used for decades. They found that altering income inequality to a Gini index of 0.1 (very low inequality) resulted in the top 10% controlling 78.6% of wealth in 2030, while raising income inequality to a Gini index of 0.9 (very high inequality) resulted in the top 10% controlling 79.3% of wealth in 2030, hardly a significant difference.

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