Tax avoidance piketty saez stantcheva aej13

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Unformatted text preview: more pay (at the expense of the 99%) when top tax rates are low ⇒ High top tax rates are desirable 23 Real changes vs. tax Avoidance? (Piketty-Saez-Stantcheva AEJ’13) Correlation between pre-tax top incomes and top tax rates If this is due to tax avoidance, real top income shares were as high as today in the 1960s-70s but top earners reported a smaller fraction of their incomes [draw graph] ⇒ correlation should be much stronger when using narrow taxable income definition than when using comprehensive income definition (including realized capital gains) Empirical correlation is very similar ruling out the pure tax avoidance scenario 24 0 Top MTR Top 1% (excl. KG) MTR K gains 1913 1923 1933 1943 1953 1963 1973 1983 1993 2003 Year 10 20 30 40 50 60 70 80 90 100 Marginal Tax Rates (%) Top 1% Share 0 Top 1% Income Shares (%) 5 10 15 20 25 Tax Avoidance: Top 1% Income Shares and Top MTR Supply-Side or Rent-Seeking? (Piketty-Saez-Stantcheva AEJ’13) Correlation between pre-tax top incomes and top tax rates If rent-seeking: growth in top 1% incomes should come at the expense of bottom 99% (...
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This note was uploaded on 01/23/2014 for the course ECON 131 taught by Professor Karp during the Spring '07 term at University of California, Berkeley.

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