Saez and Piketty replaced income data from the census with income data from the Internal Revenue Service. They then broke that down more precisely than anyone had before. This yielded three discoveries.
* The American aristocracy is less different from you and me than it was in Fitzgerald's day. "Before World War II," they wrote, "the richest Americans were overwhelmingly rentiers deriving most of their income from wealth holdings (mainly in the form of dividends)." But today, they found, the top of the heap are overwhelmingly job-holders deriving most of their income from their wages. Did it become posh to have a job ? Not exactly. Having a job—the right job, anyway—became the way to get posh. That's encouraging in one sense: To roll in the dough you now have to work for a living. But it's discouraging in another sense: You can't blame enormous income disparities on non-working coupon-clippers who exist outside the wage structure (and reality as most of us understand it). The wage structure itself is grossly misshapen.
* The share of national income going to the top 1 percent (the Rich) more than doubled during the Great Divergence and now stands at about 21 percent. The chart showing this found its way into President Obama's first budget (see Figure 9), prompting Wall Street Journal columnist Daniel Henninger to call it "the most politically potent squiggle along an axis since Arthur Laffer drew his famous curve on a napkin in the mid-1970s." But where Laffer's squiggle was an argument to lower taxes, Piketty and Saez's (the conservative Henninger noted with some dismay) was to raise them on the Rich.
* The share of national income going to the top 0.1 percent (the Stinking Rich) increased nearly fourfold during the Great Divergence. "The [inequality] phenomenon is more extreme the further you go up in the distribution," Saez told me, and it's "very strong once you pass that threshold of the top 1 percent." Canada's and the United Kingdom's Stinking Rich followed a similar (though less pronounced) trend, but Japan and France did not; in the latter two countries, the Stinking Rich received about the same proportion of national income (about 2 percent) as the Stinking Rich did in all five countries prior to the Great Divergence. In a 2009 paper, Saez and Piketty surveyed several other industrialized nations (Table 5); in none of them did the Stinking Rich come anywhere near the 7.7 percent share of national income found in the United States.
