"I don't mean to sound critical of Smith et al. They're doing the best they can given the Zucman and Saez rules of the game. But a little peek into this sausage factory should leave you wondering, just why are these the rules of the game? Why do we care (should we care) so much about the distribution of something that is essentially impossible to measure or define? If you are making money was a partner in an LLC you help to run, why should anyone care about a fictitious accounting "value" of that partnership? You can't sell it!
Why start with pretax income? If you pay half your income in taxes, does that not halve the value of the asset? Why does "wealth" include the value of proprietor and partnership income but not labor income or social security income?"