The simplest explanation for the volatility is that brutal tax rates prior to the Reagan tax cuts led the wealthy to keep their money safe and to try not to rea

The simplest explanation for the volatility is that brutal tax rates prior to the Reagan tax cuts led the wealthy to keep their money safe and to try not to realize too much income in any given year -- and if possible, hide their income entirely so that they didn't have to pay taxes. Slashing the tax rates made it more practical to just go ahead and realize any income you can get. Since earning an anomalously high income is -- obviously -- itself anomalous, it stands to reason that a high percentage of the highest incomes were due to one-shot gains, whether from cashing in on options in a company after an IPO or a vesting, making a huge trade in the market that pans out impossibly well, or simply making the deal of a lifetime in a business arrangement. Any disagreements? Other possible explanations? This is pretty interesting macroeconomic data, so I'd love to hear more thoughts.