Consumption vs. Income
By Arnold Kling
The bottom deciles of consumption exceed those for income, suggesting under-reporting of income. There is a high and rising under-reporting rate for government transfers, a source of income that is particularly important at the bottom.
There is a lot of statistical deception about poverty, because transfer payments, subsidies, and in-kind payments are often excluded, either unintentionally or intentionally. This does not mean that nobody is poor. But exactly who is poor is very badly measured. And, among other things, we do not have good data on the high marginal tax rates that many poor people face.
Thanks to Tyler Cowen for the pointer.