If I had to guess, would assume this timetable is based around the end of WW2. 1971-1945(end of WW2)=26 years. 26 years seems like a feasible amount of time for businesses to grow to the point where business owners don't need to share profits with employees to sustain growth. It's also around the amount of time when business owners welcomed their kids into company leadership positions. The post-war and somewhat "sheltered" children probably weren't as compassionate towards their fellow American (as their war-time parents were), leading to benefit reductions, lackluster pay-raises, and overall reduction of profit-sharing, etc. If you look around, it's pretty clear this has been compounding ever since.
Places like Johnstown, PA were declining about 2% per year from 1950 to 1970.
That means that things were already going wrong long before 1971.
Although the top marginal tax rate has changed drastically throughout America's history, if you look at federal tax receipts as a percentage of GDP, they've been remarkably stable hovering around 17% [0]
Similarly, education spending on K-12 has grown a lot per pupil (in constant dollars) since 1970 [1]. Its roughly doubled (in constant dollars) between 1970 and 2000
[0] https://fred.stlouisfed.org/series/FYFRGDA188S
[1] https://www2.ed.gov/about/overview/fed/10facts/edlite-chart....
As for education, the relevant factor here is college education, not K-12. It's precisely all the benefits accruing to people with a good college education that aren't accruing to those without.
Rognlie(2014) points out fatal errors in Piketty's primary analysis of wealth inequality. In summary:
“ Recent trends in both capital wealth and income are driven almost entirely by housing, with underlying mechanisms quite different from those emphasized in Capital. ” http://mattrognlie.com/piketty_diminishing_returns.pdf
I personally also think this is the main answer. In other words, all our massive productivity increases have come from people with a ton of education, and they reap all the rewards, helped with lower taxes. The median worker isn't any more educated and hasn't reaped anything.
> ...I certainly do not believe that r > g is a useful tool for the discussion of rising inequality of labor income: other mechanisms and policies are much more relevant here, e.g., supply and demand of skills and education. For instance, I point out in my book (Piketty 2014a, ch. 8–9) that the rise of top income shares in the United States over the 1980–2010 period is due for the most part to rising inequality of labor earnings, which can itself be explained by a mixture of two groups of factors: rising inequality in access to skills and to higher education over this time period in the United States, an evolution which might have been exacerbated by rising tuition fees and insufficient public investment; and exploding top managerial compensation, itself probably stimulated by changing incentives and norms, and by large cuts in top tax rates...
[1] http://webcache.googleusercontent.com/search?q=cache:x918MB5...