John Iselin and I posted a comment on accounting for tax non-compliance when estimating top 1% income shares.

In doing so, we study the largest source of divergence between Auten & Splinter and Piketty Saez & Zucman's estimates since 1980.

Thread:

danreck.com/s/CommentAuten… tl;dr A&S assume unreported income is distributed like unreported income in random audit data. Such audits do not cover pass-through income, which ballooned in the top 1% after 1986, casting doubt on the dynamic decrease in inequality in their estimates due to unreported income.

Here is a thread about the bad takes I am seeing on Twitter about the Trump tax story. If your gut reaction is nihilistic, cynical, or dismissive, I am going to try to change your mind. BAD TAKE 1: this is all 100% legal, the rich have loopholes.” We can’t diagnose evasion conclusively from the return alone, but the reporting describes some super suspicious activity. Three things jump out:

Thrilled to see this article with @jacobsgoldin finally in print! (first draft was in 2013). The paper proposes a simple framework for learning preferences from choices when choices are subject to a framing effect. Here's a short summary: Economists classically use revealed preferences to infer preferences from choices – if 70% of people select x over y, then 70% of people prefer x to y. But what if choices vary by some seemingly arbitrary factor (a “frame”)?

So how do we convey model uncertainty? I could run 100 different parameterizations and dump the output on my readers...yikes. The ideal is to be Bayesian and show the distribution of possibilities, but then my beliefs will matter, and the experts have very different beliefs here.

https://twitter.com/J_C_Suarez/status/1184620924139659264

This is not a thought experiment, I am really hung up on this problem in some ongoing work on distributional issues. Surely the macro literature has confronted this problem??

Stephen Moore’s nomination to the Fed reminded me of the time his firm, Arduin Laffer and Moore, wrote a “study” showing that Oklahoma eliminating its income tax would lead to an economic boom. Then a naive grad student, I was shocked to see research used as a political weapon. Here is the study if anyone is curious. Warning: extremely cursed. s3.amazonaws.com/assets.ocpa.co…

Reading that the GOP led committee in the House failed to find evidence of collusion with Russia, I am reminded of Sandro Ambuehl’s Job Market Paper on incentives and the demand for information, available here cesifo-group.de/DocDL/cesifo1_…

\begin{thread} The basic idea of the paper is that incentives can change the information you seek out. I’m an experiment, Sandro offered people money to eat bugs. Before they decided whether to eat bugs, he gave them the choice of viewing pro-bug-eating or anti-bug-eating information.

Somehow I am on the Trump campaign’s email list. Got this poll. Seems legit 😂😂😂 This came from rnchq.com, which is a domain registered to the actual RNC.