In a recent piece, Virgilio Urbina Lazardi argues that European countries have lower inequality than the United States because they distribute market income much more equally, not because of their welfare states.

A paper published a few years ago in the American Economic Journal has raised eyebrows within and outside of the profession. Combining national accounts data with household surveys, its authors found that the United States redistributed a greater share of its gross domestic product through taxes and transfers to its poor than any of its wealthy, mostly Western European, peers.

As it turns out, the “inequality gap” between the United States and Europe is not explicable by the comparative generosity of the latter’s welfare states, which are in fact funded by more regressive systems of indirect taxation. Rather, the key to Europe’s relatively higher levels of equality is a more egalitarian distribution of pretax market incomes.

This is not true. Lazardi is simply the latest victim of the most deceptive paper ever written on this topic.