Simon Kuznets proposed a broad hypothesis on the process of development: that economic progress is accompanied by increasing inequality in the early stages of industrialization, which then tends to decline as industrialization deepens. Recent empirical tests of the Kuznets hypothesis have raised questions about this conjecture, yet most of these studies are based on limited and deficient data. Here we examine the dynamics of inequality across the Organization for Economic Cooperation and Development (OECD) using methods that allow the construction of long and dense time series of inequality. We find that an augmented Kuznets curve for developed countries, where inequality increases with income growth for the highest-income countries, is consistent with this data set. Thus, we offer a macroeconomic alternative to the skill-biased technological change hypothesis, which has been dominant in the literature as an explanation for increasing inequality.