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The long run effect of taxes on the distribution of top income shares: an empirical investigation

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  • Christoph Gorgas
  • Christoph A. Schaltegger

Abstract

We provide empirical evidence on the impact of personal income taxes and tax competition on income concentration in Switzerland. The fact that Swiss cantons have considerable taxing power enables us to study the effect of differences in the tax burden as well as in the pressure of tax competition on the distribution of top income shares within Switzerland. Using panel regressions covering all 26 Swiss cantons over the years 1917 to 2007 we find substantial evidence that tax competition is a major driving force behind the cantonal tax setting behaviour shaping cantonal income concentration for the very top incomes significantly.

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  • Christoph Gorgas & Christoph A. Schaltegger, 2012. "The long run effect of taxes on the distribution of top income shares: an empirical investigation," CREMA Working Paper Series 2012-22, Center for Research in Economics, Management and the Arts (CREMA).
  • Handle: RePEc:cra:wpaper:2012-22
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    References listed on IDEAS

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    1. Atkinson, A. B. & Piketty, Thomas (ed.), 2010. "Top Incomes: A Global Perspective," OUP Catalogue, Oxford University Press, number 9780199286898.
    2. Thomas Piketty & Emmanuel Saez & Stefanie Stantcheva, 2014. "Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities," American Economic Journal: Economic Policy, American Economic Association, vol. 6(1), pages 230-271, February.
    3. Federico Revelli, 2001. "Spatial patterns in local taxation: tax mimicking or error mimicking?," Applied Economics, Taylor & Francis Journals, vol. 33(9), pages 1101-1107.
    4. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
    5. Leigh, Andrew & van der Eng, Pierre, 2009. "Inequality in Indonesia: What can we learn from top incomes?," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 209-212, February.
    6. Chiaki Moriguchi & Emmanuel Saez, 2008. "The Evolution of Income Concentration in Japan, 1886-2005: Evidence from Income Tax Statistics," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 713-734, November.
    7. Anthony Atkinson & Thomas Piketty, 2010. "Top Incomes : A Global Perspective," Post-Print halshs-00754875, HAL.
    8. Roine, Jesper & Vlachos, Jonas & Waldenström, Daniel, 2009. "The long-run determinants of inequality: What can we learn from top income data?," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 974-988, August.
    9. Heyndels, Bruno & Vuchelen, Jef, 1998. "Tax Mimicking Among Belgian Municipalities," National Tax Journal, National Tax Association, vol. 51(1), pages 89-101, March.
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