The headline promised an article of critical importance: “Obama’s inequality argument just utterly collapsed.”

James Pethokoukis, a conservative columnist and blogger at the American Enterprise Institute, wrote on April 11 that a new academic study put the lie to Democratic claims of endemic inequality and grotesquely distorted income gains by the top 1 percent. The “tax and regulatory policies of the past three decades,” he wrote,

did not lead to stagnation for the middle class at the hands of the rapacious rich. Claims to the contrary — such as those made by Obama, the Occupy movement, and many liberal economists — never really passed the sniff test of anyone who lived through the past few decades. And now we know why: The inequality and stagnation alarmists were wrong. And so, therefore, is the economic rationale of the president’s class-warfare economic policies.

Pethokoukis’s claim is based on the findings of three scholars: Richard V. Burkhauser, an economist at Cornell; Jeff Larrimore, an economist on the congressional Joint Committee on Taxation; and Kosali I. Simon, a professor at the Indiana University School of Public and Environmental Affairs.

Pethokoukis is a hard-core adversary of the current administration. His recently filed contributions include: “Obama’s government by gimmick: His 7 most meaningless policy gestures,” “More unintended consequences of Obamacare,” “Just how high does Obama think taxes should go? 70%? 80%? 90%?,” “The total intellectual collapse of Obama’s Buffett Rule” and “Why pretty much everything Obama is saying about income stagnation and inequality is wrong.”

The paper by Burkhauser, Larrimore and Simon on which Pethokoukis builds his argument, “A ‘Second Opinion’ on the Economic Health of the American Middle Class,” appeared in the March 2012 issue of the National Tax Journal. The paper does, in fact, provide valuable insights into the sometimes daunting arguments over inequality, income stagnation and economic stratification.

The continuing debate over social mobility and income distribution does not lend itself to facile conclusions. Some of the findings of Burkhauser et al are advantageous to the political right; others undermine the conservative agenda. I will explore both below, but first we must turn to the crucial dispute over the definition of income.

Key players in the inequality controversy include economists Emmanuel Saez of Berkeley and Thomas Piketty of the School of Economics in Paris; Burkhauser and his co-authors; and the Congressional Budget Office.

Saez and Piketty measure “market income” – that is, total income before tax minus income from government sources, like unemployment. “Think about our measure as gross income reported on tax returns (measured consistently since 1913) and before any deductions,” Saez explained in an e-mail.

Because the findings of Saez and Piketty are based on millions of United States tax returns filed over nearly a century, they are widely viewed as providing the best insight available into the share of income going to the very top of the distribution — not just the top one percent, but the top 0.5 percent, the top 0.1 percent and even the top 0.01 percent.

From 1970 to 2010, Saez and Piketty show, the share of total market income going to the top one percent more than doubled, from 9.03 to 19.77 percent. The share going to the top 0.1 percent more than tripled, from 2.78 percent to 9.52 percent; and for the top 0.01 percent, it nearly quintupled from 1.00 percent of the total to 4.63 percent.

In addition, by focusing on income as reported on tax returns, Saez and Piketty show how market mechanisms distribute wages and other taxable benefits — capital gains, dividends — as opposed to government transfers, entitlement benefits and sources of income like untaxed employer paid health insurance.

Because Saez and Piketty do not take into account welfare payments, food stamps, Medicare, Medicaid, Social Security and employer-provided health insurance (which are not reported to the I.R.S. as income), they arguably overstate inequality trends. A second caveat to bear in mind is that the Saez-Piketty findings are based on pre-tax income, which is more unequally distributed than after-tax income.

In addressing the issue of inequality, Saez and Piketty found that from 1970 to 2010, average pre-tax income per taxpayer in the bottom 90 percent of the distribution fell from $31,839 to $28,840 in inflation-adjusted dollars. For those in the top 0.01 percent, market income rose from $2.14 million a year in 1970 to $16.27 million in 2010. The gains at the top from 1970 to 2010 stand in contrast to the post-war period from 1945 to 1970 when the share of income going to those at the top fell. During those earlier 25 years, the share going to the top 1 percent dropped from 12.52 to 9.03 percent; the share going to the top 0.1 percent dropped from 4.16 to 2.78 percent, and the share going to the top 0.01 percent dropped from 1.26 to 1.00 percent.

“Emanuel and Thomas can do the top 1 percent better than anyone,” Timothy Smeeding, a professor at the University of Wisconsin’s La Follette School of Public Affairs, wrote in an e-mail to The Times. Similarly, Sheldon Danziger of the University of Michigan’s Gerald R. Ford School of Public Policy, wrote: “Only the I.R.S. data have large enough samples to focus on the very rich.” The other major source of income data, the Current Population Survey (conducted by the Census Bureau), “is too small to examine the top 1 percent,” Danziger wrote.

Gary Burtless, a senior fellow at the Brookings Institution, notes the vulnerability in the Saez and Piketty data:

“The two economists are trying to compare trends in inequality over a very long time span and in a number of different countries, and they’ve done a good job of that. Unfortunately, the only income measure available over a long time span seems to be taxable income assessed for purposes of collecting the income tax. This means the Piketty-Saez measure falls short of total income received by U.S. households,” Burtless wrote. “A lot of that income – an increasing share of it, in fact – is not ascertained in the I.R.S. statistics that Piketty-Saez use to measure income. For example, virtually all health benefits are excluded. So are untaxed government transfer benefits.”

Piketty defended the Saez-Piketty approach in an e-mail to The Times. “We have always been very clear about the fact that we study changes in the distribution of market income. Our point is that top incomes have taken a disproportionate share of market income growth over the past 30 years, and as a consequence that the market incomes of the lower and middle class have stagnated.”

Saez, in turn, said he hopes to be able to produce data on “post-tax, post-transfer, per adult, adding non-taxable income sources, etc.,” but pointed out that gathering this kind of data to the level of detail and accuracy that would allow careful exploration of the top one percent and other income groups would involve “a huge enterprise.”

In October, the non-partisan Congressional Budget Office, issued a 47-page report, “Trends in the Distribution of Household Income Between 1979 and 2007.”

The C.B.O. used information from tax returns and from the Current Population Survey to determine “real (inflation-adjusted) average household income, measured after government transfers and federal taxes.” Gains from 1979 to 2007 were heavily concentrated among those in the top one percent, with smaller gains moving down the income ladder. In contrast to Saez and Piketty, the C.B.O. report shows modest gains for every income group below the top 1 percent:

Congressional Budget Office

At the moment, there is considerable agreement that the C.B.O. analysis of overall income shares is the gold standard. “For the whole distribution,” Smeeding, of the University of Wisconsin, wrote, “C.B.O. is best.”

The C.B.O. data does deal with the effect of government transfers. But the report makes the point that government income transfer programs have changed significantly from 1979 to 2007, with less going to the poor, and more to those in the middle:

“The equalizing effect of transfers and taxes on household income was smaller in 2007 than it had been in 1979,” according to the C.B.O. “In 1979, households in the bottom quintile received more than 50 percent of transfer payments. In 2007, similar households received about 35 percent of transfers. That shift reflects the growth in spending for programs focused on the elderly population (such as Social Security and Medicare), in which benefits are not limited to low-income households. As a result, government transfers reduced the dispersion of household income by less in 2007 than in 1979.”

Which brings us back to Burkhauser. In their National Tax Journal article, Burkhauser and his co-authors add the cost of health insurance — whether it is government-paid through Medicare or Medicaid or employer-provided. They define their measure of income as: “post-tax, post-transfer, size-adjusted household income including the ex-ante value of in-kind health insurance benefits.” Many conservatives prefer this approach because it measures after-tax household income, which magnifies the share of income going to those in the middle and bottom of the income distribution and consequently makes the economic system look more equitable.

Using their measure of household income, Burkhauser and his co-authors find that median income has grown from 1979 to 2007 by a relatively healthy 36.7 percent in inflation-adjusted dollars.

The Burkhauser approach shows the bottom 20 percent of the income distribution with median income growth of 26.4 percent, while the top five percent experienced a 63 percent increase.

The Burkhauser study attempts to estimate the value of health care coverage from Medicare, Medicaid and employer provided insurance. Danziger, of the University of Michigan, notes that “Burkhauser is correct that the I.R.S. data overstate inequality because much income received by low income families is not included in Adjusted Gross Income (for example, cash welfare, food stamps). And Burkhauser is also correct that economists prefer to adjust family income to account for differences in family size. If one does that, one also gets less income inequality.”

Are the lower estimates of inequality trends found by Burkhauser cause for cheering on the right?

The driving force behind lessened inequality that Burkhauser posits stems from government intervention, combined with pressure on the private sector to provide health care benefits — the very things the right objects to.

Food stamps, Medicaid, Medicare, Social Security, the tax exemption for employer-provided health insurance – all of these are major factors in lessening inequality. At least two of these – Medicaid and food stamps – would be cut sharply under the budget plan approved by House Republicans in March, which Mitt Romney has endorsed.

The second major criticism of the Burkhauser approach involves the inclusion of the cost of health coverage. Health care costs have been rising at a much faster pace than inflation, which makes income appear to rise quickly.

“So,” Saez argues in his e-mail to The Times, “the argument (of the right) has to be: cash market income of the bottom 99 percent of adults has stagnated but the bottom 99 percent get much more expensive private and government provided health care benefits, some more government transfers, and they have fewer kids. This does not seem like a great situation, especially from a conservative point of view.”

Timothy Noah, a senior editor at The New Republic and the author of “The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It,” replied in response to an inquiry from The Times:

No matter whose data you use, you find a.) median income growth since 1979 is paltry compared to the 50s and 60s; b.) most of the growth occurred under Clinton during the late-1990s tech bubble; c.) median income growth, which kept up with income growth for the rich during the 50s and 60s (sometimes even exceeding it, thereby making incomes more equal) has most emphatically not kept up with income growth for the rich since 1979.

Conservatives might do well to reconsider their hostility to the Saez-Piketty analysis. The two economists, by their own admission, are not describing all income, but they are much closer to the ideal of the political right: an America with little or no welfare state and the lowest possible tax burden, especially taxes on income from capital.

Paul Ryan, chairman of the House Budget Committee and principal architect of current Republican fiscal policy, is determined to reverse the nation’s slide into what he sees as socialism. “We’re reaching a tipping point in this country, after which the majority of Americans are more dependent on the government than they are upon themselves,” Ryan told Newsmax last year. His view of the American welfare state, especially programs geared to the poor, is equally clear: “We don’t want to turn the safety net into a hammock that lulls able bodied people into lives of complacency and dependency, and have that dependency culture. That’s not the American way, that’s not the American dream.”

Center for Budget and Policy Priorities

Ryan’s “hammock,” as it is currently constructed, leaves recipients of Temporary Assistance to Needy Families (better known as welfare) and the Supplemental Nutrition Assistance Program (better known as food stamps), well below the poverty line, which in 2011 was $18,123 for a family of three, a level unlikely to lull many “able bodied people into lives of complacency and dependency.”

Thomas B. Edsall, a professor of journalism at Columbia University, is the author of the book “The Age of Austerity: How Scarcity Will Remake American Politics,” which was published in January.