5  In general, measures of economic well-being (such as disposable income) that take account of taxes paid and transfer payments received from the government show lower levels of inequality at any point in time than measures that exclude such payments; the difference reflects the progressive nature of our system of taxes and transfers.
However, analysis of these broader measures indicates that, over time, tax and transfer policies have not materially altered the general tendency toward greater inequality. 6  Data on the distribution of income in the top 1 percent comes from an update of Piketty and Saez (2003), available at http://elsa.berkeley.edu/~saez/TabFig2004prel.xls.