
Mapping Income Inequality in the US Using IRS SOI Data - bheni
https://www.dolthub.com/blog/2020-02-03-mapping-income-inequality-using-irs-soi-data/
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sokoloff
It seems like no control or adjustment is made for individual vs joint returns
(and therefore none for household size). I’d expect a state with greater
makeup of joint returns to have a lower reported percentage.

What I don’t have a good sense for is how different the splits are by state,
but it seems like “per capita income inequality” is a lot more interesting
than “per return income inequality”.

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dragonwriter
> It seems like no control or adjustment is made for individual vs joint
> returns (and therefore none for household size).

Adjusting for the latter doesn't require consideration of the former at all,
and consideration of the former doesn't much help with the latter, so the “and
therefore” makes no sense.

What you need for the latter is just consideration of the number of personal
exemptions, not filing status.

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danans
Presumably the GP is referring to the "marriage penalty/bonus" phenomenon that
can happen due to filing status for certain people, especially dual income
joint filing households vs. single income joint filing households [1].

States with a higher proportion of dual similar-income joint filers with fewer
children might hit the penalty more often (like a 2 doctor or lawyer
household), and states with higher proportions of single or highly disparate
income joint filing households (with a stay-at-home or marginally employed
spouse) with more children would hit the bonus more often.

But as you mention that effect is usually dominated by the effect of personal
exemptions, and not by the fact that tax bracket thresholds between individual
and joint filers don't line up perfectly while normalizing for number of
filers.

Correction: the marriage penalty/bonus has more to do with the disparity in
spousal income than magnitude.

1\. [https://www.investopedia.com/terms/m/marriage-
penalty.asp](https://www.investopedia.com/terms/m/marriage-penalty.asp)

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samspenc
My takeaway from the graph is that overall, most states are "green" or are
more or less evenly distributed. However these states stand out as "red" (more
inequality), which seems to me due to the following industry outliers:

    
    
      CA: tech industry
      NY: financial industry
      CT: financial industry
      TX: energy industry?
      FL: wealthy retirees?

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JackFr
TX, FL (& NV) no state income tax.

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starpilot
Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.

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JackFr
But few rich people want to spend 183 days a year in Alaska, South Dakota or
Wyoming.

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A4ET8a8uTh0
I find that part surprising. I get Alaska due to weather, but SD and WY are
visually stunning and weather seemed is reasonable.

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mnm1
I think most people have very different criteria for what would make them live
in a place for half their lives, especially people who can afford to live
anywhere. Nature and weather are not unimportant, but far from the topmost
criteria for a lot of people. Having family, friends, community, and other
relations is often much more important. As is having the ability to do what
one loves. In many cases, all those things are missing. I bet after a month or
two in sd or wy, most people are ready to leave and never come back. Plus they
compete with other non income tax states like Washington, Florida, and Texas
that have a lot more to offer.

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A4ET8a8uTh0
It is a fair point. It really boils down to what you want. I keep thinking
about it from my perspective.

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smegma2
How do we go about deciding what an appropriate percentage to make up 50% of
AGI is? How much inequality is acceptable?

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WalterBright
> How much inequality is acceptable?

Without inequality you'd also have to give up Teslas, SpaceX, and all those
initiatives Bill Gates is investing in. Keep in mind that something like 37%
of Federal Income taxes come from the 1%. Eliminate the 1%, and who is going
to make up that money?

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Rury
>Eliminate the 1%, and who is going to make up that money?

If by eliminate, you mean equalize the inequality - then the remaining 99%
will contribute more as they'll be making more money...

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smegma2
I guess you're saying that the earnings of the 1% stifle the earnings of the
99%. Do you know how we can go about verifying this, as well as finding out
what upper percentile of earners stifle the earnings of others? For example do
the earnings of the top 10% stifle the earnings of the top 90% as well?

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Rury
I'm not saying anything about stifling.

I'm saying hypothetically you can take the top richest people's incomes and
redistribute it to everyone. Since everyone else would then have more income,
everyone else would be paying more in taxes; counter-balancing the loss in
taxes the richest people would no longer be paying.

The federal income wouldn't perfectly balance though, as some of that re-
distributed income would be taxed at lower tax brackets. However, the
government could always re-adjust the tax brackets as necessary to make it
zero-sum.

Anyhow, the broader point is that inequality isn't a requirement when it comes
to federal taxes.

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StLCylone
Iowa and West Virginia are bright green in all years. I guess no rich people
live there.

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JackFr
Or they're all rich.

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komali2
Well, West Virginia has the lowest average income in the entire United States
[https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...](https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_income)

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symplee
The spectrum of color only represents percentages between 7.8 and 17.6%.

I imagine it would look a lot less dramatic if the scale was from 0% (bright
red), to 100% (bright green).

It would also be interesting to have a slider to adjust the threshold point
(it's currently fixed at 50%).

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microcolonel
Is there a good source anywhere of median or percentile-bracketed individual
post-tax income in the U.S.? I can get the aggregate number for the whole
country in a couple places, but can't seem to find it by state.

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timsehn
The dataset used to create this map:

[https://www.dolthub.com/repositories/Liquidata/irs-
soi/](https://www.dolthub.com/repositories/Liquidata/irs-soi/)

Has tax data aggregated by zip. You can get the median zip code in a state
from it because it only has totals so you can only calculate averages
otherwise.

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jimbob45
To anyone else frustrated by the lack of year-by-year images, you can click on
the animation and pause it on whichever year you wish to more closely analyze.

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OrgNet
a table with data would make it easier to visualize the difference between the
years

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analyst74
Not sure what color scheme it's using, but it is very color-blind unfriendly.

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rconti
best describe as "green and red", so, yeah, I imagine it would not be remotely
colorblind-friendly.

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plopz
What's the significance for using 50% as the break point?

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bheni
There is no particular significance to that number, it was chosen because I
had seen similar metrics before but always for the whole country, or the
entire world, and it usually was a measure of wealth not income. Example:

[https://www.cnbc.com/2017/11/14/richest-1-percent-now-own-
ha...](https://www.cnbc.com/2017/11/14/richest-1-percent-now-own-half-the-
worlds-wealth.html)

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gnicholas
Does this account for cost of living? It seems that the states with higher
incomes also happen to be the states with higher costs of living.

