Journal Article

Trends and gradients in top tax elasticities: cross-country evidence, 1900-2014

Authors

Publication date

Jun 2019

Summary

We construct a cross-country dataset spanning 1900–2014 to estimate the tax elasticity of top incomes. Our results show that top tax elasticities vary tremendously over time; they were medium to low before 1950, dropped to almost zero during the postwar era and increased to unprecedented levels since 1980.We document a marked income gradient of increasing tax responsiveness at the top. Tax avoidance, especially income shifting between wage and capital income, appears to be one important driver of these patterns. Wars, financial crises, and country-specific effects and trends also have a bearing on top elasticities.

Published in

International Tax and Public Finance

Volume and page numbers

26 , 457 -485

DOI

https://doi.org/10.1007/s10797-018-9524-1

ISSN

16

Subjects

Economics, Income Dynamics, and Taxation

Links

University of Essex, Albert Sloman Library Periodicals *restricted to University of Essex registered users* - http://serlib0.essex.ac.uk/record=b1617625~S5

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