Header

UZH-Logo

Maintenance Infos

Taxation and the superrich


Scheuer, Florian; Slemrod, Joel (2020). Taxation and the superrich. Annual Review of Economics, 12:189-211.

Abstract

This article addresses the modern optimal tax progressivity literature, which clarifies the key role of the behavioral response to taxation and accounts for the incomes of the superrich being qualitatively different from others. Some of the superrich may be “superstars” for whom small differences in talent are magnified into much larger earnings differences, while others may work in winner-take-all markets, such that their effort to climb the ladder of success reduces the returns to others. We stress that pivotal tax-rate elasticities are not structural parameters and will be smaller the broader and less plastic is the tax base and the more effective is the enforcement of tax evasion. For this reason, normative analysis of tax rates should be accompanied by attention to the tax base, with a special focus on capital gains, which comprise a large fraction of the taxable income of the superrich.

Abstract

This article addresses the modern optimal tax progressivity literature, which clarifies the key role of the behavioral response to taxation and accounts for the incomes of the superrich being qualitatively different from others. Some of the superrich may be “superstars” for whom small differences in talent are magnified into much larger earnings differences, while others may work in winner-take-all markets, such that their effort to climb the ladder of success reduces the returns to others. We stress that pivotal tax-rate elasticities are not structural parameters and will be smaller the broader and less plastic is the tax base and the more effective is the enforcement of tax evasion. For this reason, normative analysis of tax rates should be accompanied by attention to the tax base, with a special focus on capital gains, which comprise a large fraction of the taxable income of the superrich.

Statistics

Citations

Altmetrics

Downloads

0 downloads since deposited on 24 Sep 2020
0 downloads since 12 months

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Uncontrolled Keywords:Superrich, tax systems, superstars, winner-take-all markets, plasticity of taxable income, wealth taxes
Language:English
Date:August 2020
Deposited On:24 Sep 2020 08:54
Last Modified:24 Sep 2020 10:06
Publisher:Annual Reviews
ISSN:1941-1383
Additional Information:Auch publiziert als Working Paper 337, Department of Economics, University of Zurich und als NBER Working Paper No. 26207
OA Status:Closed
Free access at:Related URL. An embargo period may apply.
Publisher DOI:https://doi.org/10.1146/annurev-economics-081919-115106
Related URLs:https://www.zora.uzh.ch/id/eprint/174876/
https://www.nber.org/papers/w26207

Download

Closed Access: Download allowed only for UZH members

Content: Published Version
Filetype: PDF - Registered users only
Size: 611kB
View at publisher