We assess income inequality across French and British colonial empires between 1920 and 1960, exploiting for the first time income tax tabulations. As measured by top income shares, inequality was ...high in colonies. Europeans comprised the bulk of top income earners, and only a minority of autochthons could compete income-wise. Top income shares were no higher in settlement colonies, those territories were wealthier and the average European settler was less rich than the average expatriate. Inequality among autochthons was moderate, and inequality among Europeans was similar to that of the metropoles. The post-WWII fall in income inequality can be explained by the one among Europeans, mirroring that of the metropoles, and does not imply that the European/autochthon income gap was very much reduced. After independence, the mass recruitment of state employees induced a large increase in inequality among autochthons. Dualistic structures lost their racial dimension and changed shape, yet persisted.
•Income tax data are used to measure inequality in French and British colonies.•Only a minority of autochthons could compete income-wise with European settlers.•Top income shares were no higher in settlement colonies.•Inequality among Europeans was similar to that of the metropoles.•After independence dualistic structures lost their racial dimension yet persisted.
This paper uses data from income tax returns (1915–98), wage tax returns (1919–98), and inheritance tax returns (1902–94) in order to compute homogeneous, yearly estimates of income, wage, and wealth ...inequality for twentieth‐century France. The main conclusion is that the decline in income inequality that took place during the first half of the century was mostly accidental. In France, and possibly in a number of other countries as well, wage inequality has been extremely stable in the long run, and the secular decline in income inequality is for the most part a capital income phenomenon. Holders of large fortunes were badly hurt by major shocks during the 1914–45 period, and they were never able to fully recover from these shocks, probably because of the dynamic effects of progressive taxation on capital accumulation and pretax income inequality.
In this article, I present some of the findings of my book Capital in the 21st Century. In particular, I clarify the role played by r > g in my analysis of wealth inequality. I also discuss some of ...the implications for optimal taxation, and the relation between capital-income ratios and capital shares.
The top 1 percent income share has more than doubled in the United States over the last 30 years, drawing much public attention in recent years. While other English-speaking countries have also ...experienced sharp increases in the top 1 percent income share, many high-income countries such as Japan, France, or Germany have seen much less increase in top income shares. Hence, the explanation cannot rely solely on forces common to advanced countries, such as the impact of new technologies and globalization on the supply and demand for skills. Moreover, the explanations have to accommodate the falls in top income shares earlier in the twentieth century experienced in virtually all high-income countries. We highlight four main factors. The first is the impact of tax policy, which has varied over time and differs across countries. Top tax rates have moved in the opposite direction from top income shares. The effects of top rate cuts can operate in conjunction with other mechanisms. The second factor is a richer view of the labor market, where we contrast the standard supply-side model with one where pay is determined by bargaining and the reactions to top rate cuts may lead simply to a redistribution of surplus. Indeed, top rate cuts may lead managerial energies to be diverted to increasing their remuneration at the expense of enterprise growth and employment. The third factor is capital income. Overall, private wealth (relative to income) has followed a U-shaped path over time, particularly in Europe, where inherited wealth is, in Europe if not in the United States, making a return. The fourth, little investigated, element is the correlation between earned income and capital income, which has substantially increased in recent decades in the United States. PUBLICATION ABSTRACT
Abstract
This article sheds new light on the long-run evolution of political cleavages in 21 Western democracies. We exploit a new database on the socioeconomic determinants of the vote, covering ...more than 300 elections held between 1948 and 2020. In the 1950s and 1960s, the vote for social democratic, socialist, and affiliated parties was associated with lower-educated and low-income voters. It has gradually become associated with higher-educated voters, giving rise in the 2010s to a disconnection between the effects of income and education on the vote: higher-educated voters now vote for the “left,” while high-income voters continue to vote for the “right.” This transition has been accelerated by the rise of green and anti-immigration movements, whose distinctive feature is to concentrate the votes of the higher-educated and lower-educated electorates. Combining our database with historical data on political parties’ programs, we provide evidence that the reversal of the education cleavage is strongly linked to the emergence of a new “sociocultural” axis of political conflict.
In this paper we combine household surveys, national accounts, income tax data and wealth data in order to estimate income concentration in the Middle East for the period 1990–2016. According to our ...benchmark series, the Middle East appears to be the most unequal region in the world, with a top decile income share as large as 64 percent, compared to 37 percent in Western Europe, 47 percent in the US and 55 percent in Brazil (see Alvaredo et al. 2018). This is due both to enormous inequality between countries (particularly between oil‐rich and population‐rich countries) and to large inequality within countries (which we probably under‐estimate, given the limited access to proper fiscal data). We stress the importance of increasing transparency on income and wealth in the Middle East, as well as the need to develop mechanisms of regional redistribution and investment.
Rethinking capital and wealth taxation Piketty, Thomas; Saez, Emmanuel; Zucman, Gabriel
Oxford review of economic policy,
08/2023, Letnik:
39, Številka:
3
Journal Article
Recenzirano
Odprti dostop
Abstract
This paper reviews recent developments in the theory and practice of optimal capital taxation. We emphasize three main rationales for capital taxation. First, the frontier between capital ...and labour income flows is often fuzzy, thereby lending support to a broad-based, comprehensive income tax. Next, the very notions of income and consumption flows are difficult to define and measure for top wealth holders where capital gains due to asset price effects dwarf ordinary income and consumption flows. Therefore the proper way to tax billionaires is a progressive wealth tax. Finally, as individuals cannot choose their parents, there are strong meritocratic reasons why we should tax inherited wealth more than earned income or self-made wealth for which individuals can be held responsible, at least in part. This implies that the ideal fiscal system should also include a progressive inheritance tax, in addition to progressive income and wealth taxes. We then confront our prescriptions with historical experience. Although there are significant differences, we argue that observed fiscal systems in modern democracies bear important similarities with this ideal triptych.
Top Incomes Atkinson, A. B; Piketty, Thomas
2010, 2010-04-01, 20100101
eBook, Book
This volume brings together an exciting range of new studies of top incomes in a wide range of countries from around the world. The studies use data from income tax records to cast light on the ...dramatic changes that have taken place at the top of the income distribution. The results cover 22 countries and have a long time span, going back to 1875.
This paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the United States using individual tax returns data. Top income and wages shares display a U-shaped ...pattern over the century. Our series suggest that the large shocks that capital owners experienced during the Great Depression and World War II have had a permanent effect on top capital incomes. We argue that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks. Top wage shares were flat before World War II, dropped precipitously during the war, and did not start to recover before the late 1960s but are now higher than before World War II. As a result, the working rich have replaced the rentiers at the top of the income distribution.
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