In this article, I present three key facts about income and wealth inequality in the long run emerging from my book Capital in the Twenty-First Century and seek to sharpen and refocus the discussion about those trends. In particular, I clarify the role played by r > g in my analysis of wealth inequality. I also discuss some of the implications for optimal taxation, and the relation between capital-income ratios and capital shares.

This paper summarizes the main findings and perspectives emerging from a collective research project on the dynamics of income and wealth distribution. The primary objective of this project is to construct a high-quality, longrun, international database on income and wealth concentration, using historical tax statistics. The resulting database now includes annual series covering most of the twentieth century for a number of (mostly Western) countries. 1 The main motivation for this project comes from a general dissatisfaction with existing income inequality databases. Existing international databases display little homogeneity over time or across countries. They cover only a few isolated years per country, generally restricted to the post-1970 or post-1980 period. They almost never offer any decomposition of income inequality into a labor-income and a capitalincome component. Economic mechanisms can be very different for the distribution of labor income (demand and supply of skills, labor market institutions, etc.) and the distribution of capital income (capital accumulation, credit constraints, inheritance law and taxation, etc.), so that it is difficult to test any of these mechanisms using existing data. The fact that existing data are not long run is also problematic, because structural changes in income and wealth distribution often span several decades.

Using large samples of estate tax returns, we construct new series on wealth concentration in Paris and France from 1807 to 1994. Inequality increased until 1914 because industrial and financial estates grew dramatically. Then, adverse shocks, rather than a Kuznets-type process, led to a massive decline in inequality. The very high wealth concentration prior to 1914 benefited retired individuals living off capital income (rentiers) rather than entrepreneurs. The very rich were in their seventies and eighties, whereas they had been in their fifties a half century earlier and would be so again after World War II. Our results shed new light on ongoing debates about wealth inequality and growth.

We combine national accounts, surveys, and new tax data to study the accumulation and distribution of income and wealth in China from 1978 to 2015. The national wealth-income ratio increased from 350 percent in 1978 to 700 percent in 2015, while the share of public property in national wealth declined from 70 percent to 30 percent. We provide sharp upward revision of official inequality estimates. The top 10 percent income share rose from 27 percent to 41 percent between 1978 and 2015; the bottom 50 percent share dropped from 27 percent to 15 percent. China’s inequality levels used to be close to Nordic countries and are now approaching US levels.

This paper presents new findings on global inequality dynamics from the World Wealth and Income Database (WID.world), with particular emphasis on the contrast between the trends observed in the United States, China, France, and the United Kingdom. We observe rising top income and wealth shares in nearly all countries in recent decades. But the magnitude of the increase varies substantially, thereby suggesting that different country-specific policies and institutions matter considerably. Long-run wealth inequality dynamics appear to be highly unstable. We stress the need for more democratic transparency on income and wealth dynamics and better access to administrative and financial data.