1,721,350 research outputs found
The Evolution of Top Incomes: A Historical and International Perspective
Get PDFThis paper summarizes the main findings of the recent studies that have constructed top income and wealth shares series over the century for a number of countries using tax statistics. Most countries experience a dramatic drop in top income shares in the first part of the century due to a precipitous drop in large wealth holdings during the wars and depression shocks. Top income shares do not recover in the immediate post war decades. However, over the last 30 years, top income shares have increased substantially in English speaking countries but not at all in continental Europe countries or Japan. This increase is due to an unprecedented surge in top wage incomes starting in the 1970s and accelerating in the 1990s. As a result, top wage earners have replaced capital income earners at the top of the income distribution in English speaking countries. We discuss the proposed explanations and the main questions that remain open.
Emmanuel Saez: 2009 John Bates Clark Medalist
No full text Emmanuel Saez, winner of the 2009 John Bates Clark Medal, has distinguished himself by making fundamental contributions concerning critical theoretical and empirical issues within the field of public economics. He is one of those exceptional scholars whose work reflects a broad and thoroughly integrated vision. In carefully and creatively implementing that vision, he has led a remarkable resurgence of interest in tax policy research over the last decade. Emmanuel's work can be divided into five areas: the theory of optimal taxes and transfers; the measurement of income and wealth distributions; the measurement of behavioral responses to personal taxation; the taxation of corporate dividends; and retirement saving. A great deal of his work is closely interrelated across these topics, which makes the whole considerably greater than the sum of the parts. In effect, he has bridged the chasm between theory and practical policymaking by attacking the policy design problem from both sides at once. This article provides a survey of Emmanuel's work. </jats:p
Eine Welt voller Möglichkeiten: Rezension zu "Der Triumph der Ungerechtigkeit: Steuern und Ungleichheit im 21. Jahrhundert" von Emmanuel Saez und Gabriel Zucman
Get PDFEmmanuel Saez, Gabriel Zucman: Der Triumph der Ungerechtigkeit - Steuern und Ungleichheit im 21. Jahrhundert. Berlin: Suhrkamp 2020. 978-3-518-42935-
Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data
Get PDFAlthough the vast majority of US research on trends in the inequality of family income is based on public-use March Current Population Survey (CPS) data, a new wave of research based on Internal Revenue Service (IRS) tax return data reports substantially higher levels of inequality and faster growing trends. We show that these apparently inconsistent estimates can largely be reconciled once one uses internal CPS data (which better captures the top of the income distribution than public-use CPS data) and defines the income distribution in the same way. Using internal CPS data for 1967–2006, we closely match the IRS data-based estimates of top income shares reported by Piketty and Saez (2003), with the exception of the share of the top 1 percent of the distribution during 1993–2000. Our results imply that, if inequality has increased substantially since 1993, the increase is confined to income changes for those in the top 1 percent of the distribution.
The Case for a Progressive Tax: From Basic Research to Policy Recommendations
Get PDFThis paper presents the case for tax progressivity based on recent results in optimal tax theory. We consider the optimal progressivity of earnings taxation and whether capital income should be taxed. We critically discuss the academic research on these topics and when and how the results can be used for policy recommendations. We argue that a result from basic research is relevant for policy only if (a) it is based on economic mechanisms that are empirically relevant and first order to the problem, (b) it is reasonably robust to changes in the modeling assumptions, (c) the policy prescription is implementable (i.e., is socially acceptable and is not too complex). We obtain three policy recommendations from basic research that satisfy these criteria reasonably well. First, very high earners should be subject to high and rising marginal tax rates on earnings. Second, low income families should be encouraged to work with earnings subsidies, which should then be phased-out with high implicit marginal tax rates. Third, capital income should be taxed. We explain why the famous zero marginal tax rate result for the top earner in the Mirrlees model and the zero capital income tax rate results of Chamley-Judd and Atkinson-Stiglitz are not policy relevant in our view.optimal taxation
A "Second Opinion" on the Economic Health of the American Middle Class
Get PDFResearchers considering levels and trends in the resources available to the middle class traditionally measure the pre-tax cash income of either tax units or households. In this paper, we demonstrate that this choice carries significant implications for assessing income trends. Focusing on tax units rather than households greatly reduces measured growth in middle class income. Furthermore, excluding the effect of taxes and the value of in-kind benefits further reduces observed improvements in the resources of the middle class. Finally, we show how these distinctions change the observed distribution of benefits from the tax exclusion of employer provided health insurance.
The Evolution of High Incomes in Canada, 1920-2000
Get PDFThis paper presents new homogeneous series on top shares of income from 1920 to 2000 in Canada using personal income tax return data. Top income shares display a U-shaped pattern over the century, with a precipitous drop during World War II, followed by a slower decline until 1970. Since the late 1970s, top income shares have been increasing steadily and the very top shares are now as high as in the pre-war era. As in the United States, the recent increase in top income shares is the consequence of a surge in top wages and salaries. As a result, series on the composition of incomes within the top income groups from 1946 to 2000 show a dramatic increase in the share of wages and salaries. The parallel evolution of top income shares in Canada and the United States, associated with much more modest marginal tax rate cuts in Canada, suggests that the upward trend in top shares in Canada since the late 1970s cannot be explained by tax cuts. Further evidence suggests that the upward trend in Canada derives from the United States, perhaps because many Canadians have an emigration option. A data appendix for this paper is available.
What Determines Top Income Shares? Evidence from the Twentieth Century
Get PDFThis paper examines the long-run determinants of the evolution of top income shares. Using a newly assembled panel of 16 developed countries over the entire twentieth century, we find that financial development disproportionately boosts top incomes. This effect appears to be particularly strong during the early stages of a country’s development. Economic growth is strongly pro-rich which is inconsistent with globalized labor markets determining the incomes of elites. Furthermore, international trade is not associated with increases in top incomes on average, but is so in Anglo-Saxon countries. Finally, tax progressivity has a significant negative effect on top income shares whereas government spending has no such clear impact on inequality.Top incomes; income inequality; financial development; trade openness; government spending; economic development
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