Working Paper: CEPR ID: DP5090
Authors: Fabian Dell; Thomas Piketty; Emmanuel Saez
Abstract: This paper presents homogeneous series on top shares of income and wealth in Switzerland since 1913 using personal income and wealth tax return statistics. In contrast to other countries such as Canada, France, the United Kingdom, the Netherlands or the United States, top income and wealth shares in Switzerland are strikingly flat over the century, and display no secular downtrend from the early part of the century to the post-World War II period. Switzerland hardly ever implemented a very progressive income and wealth tax structure and top income and wealth tax rates have been very low relative to other developed countries. Therefore, our findings for Switzerland lead much credence to the view that the development of very progressive taxation is the central factor explaining the sustained decline in wealth and income concentration in countries such as Canada, France, the United Kingdom, the Netherlands, or the United States.
Keywords: income inequality; taxation; wealth inequality
JEL Codes: O15; O52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Taxation structures (H20) | Income/Wealth concentration (D31) |
| Flat taxation system (H29) | Stability of top income and wealth shares (D31) |
| Lack of progressive taxation (H29) | Sustained levels of income and wealth concentration (D31) |
| Absence of inheritance and estate taxes (H24) | High levels of wealth concentration (D31) |
| Progressive taxation in other countries (H29) | Reduction in income and wealth concentration (D31) |
| World wars (N44) | Impact on income and wealth concentration (D31) |