  Accurately estimating income Pareto exponents is challenging due to
limitations in data availability and the applicability of statistical methods.
Using tabulated summaries of incomes from tax authorities and a recent
estimation method, we estimate income Pareto exponents in U.S. for 1916-2019.
We find that during the past three decades, the capital and labor income Pareto
exponents have been stable at around 1.2 and 2. Our findings suggest that the
top tail income and wealth inequality is higher and wealthy agents have twice
as large an impact on the aggregate economy than previously thought but there
is no clear trend post-1985.
