The Census Bureau does not count two‐​thirds of government subsidies to households (called transfer payments) as income or any taxes taken as reductions to income, so, it overstates both income inequality and poverty. Counting all subsidies and taxes shows that income inequality is far less than claimed and continuing to fall.

These overstatements have justified higher subsidies to lower‐​income households, that in turn have caused twice as many work‐​age adults in lower‐​income households to stop working.

By not counting two‐​thirds of all transfer payments as income to the recipients of the transfers and not counting taxes paid as income lost to taxpayers, government statistics dramatically overstate income inequality.

Income inequality is lower today than it was three‐​quarters of a century ago. The facts reveal a very different and better America than the one currently described in debates across much of the political spectrum.