The Gini coefficient is the generally-accepted standard measure of inequality,
and the dark-green bars show the amount of after-tax income inequality in 16
OECD countries (click on the chart for a bigger version). The difference between
the bars, shown in light green, is a measure of redistribution, basically: the
larger number is the amount of pre-tax income inequality.
As Wilkinson points out, the US has less income inequality, before taxes, than
the UK; it’s tied with both Germany and Australia. (Yes, Germany – but
remember it’s still not all that much time since West Germany absorbed East
Germany, large parts of which are still very depressed, and that skews things
For those of us who laud the Scandinavian model, the numbers for Sweden are
worth noting. Sweden is clearly successful in redistributing income, since its
after-tax Gini coefficient of 25 is much lower than the 37 seen in the US. But
interestingly it seems happy with a lot of before-tax inequality, since the
market-income Gini coefficient is a high 46.