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Measuring Top Incomes Using Tax Record Data: A Cautionary Tale from Australia

  • Richard V. Burkhauser
  • Markus H. Hahn
  • Roger Wilkins

Atkinson, Piketty, and Saez (2011) survey an important new literature using income tax-based data to measure the share of income held by top income groups. But changes in tax legislation that expand the tax base to include income sources (e.g. capital gains, dividends, etc.) disproportionately held by these groups will conflate such an expansion with an increase in the share of income they hold. We provide a cautionary tale from Australia of how comprehensive tax reform legislation in 1985 substantially altered Australian top income series, especially those that do not separate taxable realized capital gains from other taxable income.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19121.

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Date of creation: Jun 2013
Date of revision:
Publication status: published as Richard Burkhauser & Markus Hahn & Roger Wilkins, 2015. "Measuring top incomes using tax record data: a cautionary tale from Australia," Journal of Economic Inequality, Springer, vol. 13(2), pages 181-205, June.
Handle: RePEc:nbr:nberwo:19121
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  1. John C. Handley & Krishnan Maheswaran, 2008. "A Measure of the Efficacy of the Australian Imputation Tax System," The Economic Record, The Economic Society of Australia, vol. 84(264), pages 82-94, 03.
  2. Jesper Roine & Daniel Waldenström, 2011. "Common Trends and Shocks to Top Incomes: A Structural Breaks Approach," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 832-846, August.
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  5. Joel Slemrod, 1996. "High-Income Families and the Tax Changes of the 1980s: The Anatomy of Behavioral Response," NBER Chapters, in: Empirical Foundations of Household Taxation, pages 169-192 National Bureau of Economic Research, Inc.
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  10. Nicole Watson & Mark Wooden, 2010. "The HILDA Survey: Progress and Future Developments," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(3), pages 326-336.
  11. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  12. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
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