(Actual) Income Inequality

Alex Tabarrok posts on the share of taxes paid by those with high incomes. I left a comment (slightly edited below):

The CBO figures come largely from the IRS SOI (statistics of income). Assuming high net worth individuals are not stupider than the average Joe, if the IRS’s SOI did not seriously understate the income of high net worth individuals, PricewaterhouseCoopers and the like would not offer extremely pricey services to high net worth individuals because there wouldn’t be high net worth individuals willing to pay for those pricey services.

On the other hand, the SOI are probably pretty accurate at counting income off some working stiff’s W-2.

Update… edited a bit more… grammatical error removed.