Aside from the regressive tax policies of the last 30+ years, and all those loopholes (carried interest, I am looking at you), the major issue is that we've been in a bond market boom for 30+ years.<p>Asset prices inversely correlate the with interest rates. Rich folks own assets. Those have increased faster than the growth rate of the economy because interest rates have been trending down for 30+ years.<p>That being said, we've reached the end of that trade--mostly because interest rates don't have anywhere else to go but up. Overnight rates in most of G-7 are close to 0%.<p>So if interest rates reverse their course (even if only slightly), the asset owning rich will suffer, and earners will gain.
I read Piketty's book, and largely agreed with his data and models. I don't understand this paper well enough to criticize it but I did find it off putting.<p>I think that Piketty's book is valuable as a warning of the diminishing power of labor vs. people with large amounts of capital. You can nitpick about some of the data and models, but the overall message is right on.