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Top Incomes in the United Kingdom Over the Twentieth Century

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  • Tony Atkinson

Abstract

In 1909 the United Kingdom Government introduced “super-tax†, which was an additional income tax levied on top incomes. This provided information on the distribution of total incomes that had not previously been available on a regular basis, since under the ordinary income tax, the authorities did not know the total income of individuals, which could be the subject of several separate assessments. Super-tax remained in existence until 1972, by which time other income tax sources (the Survey of Personal Incomes) were in place to allow the series to be continued. The aim of this paper is to examine what can be said from the published super-tax statistics about the evolution of top incomes in the United Kingdom. The paper spells out the limitations of the super-tax information, and the problems in establishing control totals for total population and total income, but argues that it provides a unique source of evidence about the distribution of top incomes covering virtually the whole of the twentieth century. The resulting picture, if blurred in places, allows us to draw broad conclusions about developments over the twentieth century. There is no longer the extent of inequality to be found before the First World War, with the Upper Ten Thousand receiving nearly a tenth of total income. The magnitude of the change may be need to be qualified in the light of fiscal re-arrangement, but there have been distinct periods of equalisation, notably during the two world wars, from 1946–1957 and from 1965–1972. But there is no steady trend. There have been plateaux. Since 1979, we have seen a reversal, with shares of the top income groups returning to their position of fifty years earlier. The equalisation of the post-war period has been lost.

Suggested Citation

  • Tony Atkinson, 2002. "Top Incomes in the United Kingdom Over the Twentieth Century," Oxford Economic and Social History Working Papers _043, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:esohwp:_043
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    References listed on IDEAS

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    1. A. L. Bowley, 1914. "The British Super-Tax and the Distribution of Income," The Quarterly Journal of Economics, Oxford University Press, vol. 28(2), pages 255-268.
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    6. Tom Clark & Jayne Taylor, 1999. "Income inequality: a tale of two cycles?," Fiscal Studies, Institute for Fiscal Studies, vol. 20(4), pages 387-408, December.
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    3. Studer, Roman, 2008. "India and the Great Divergence: Assessing the Efficiency of Grain Markets in Eighteenth- and Nineteenth-Century India," The Journal of Economic History, Cambridge University Press, vol. 68(2), pages 393-437, June.
    4. Alexandre Debs, 2003. "The Source of Walras`s Idealist Bias: A Review of Koppl`s Solution to the Walras Paradox," Oxford Economic and Social History Working Papers _049, University of Oxford, Department of Economics.
    5. Jane Humphries & Tim Leunig, 2007. "Cities, Market Integration and Going to Sea: Stunting and the Standard of Living in Early Nineteenth-Century England and Wales," Oxford Economic and Social History Working Papers _066, University of Oxford, Department of Economics.
    6. Mark C. Freeman, 2004. "Can Market Incompleteness Resolve Asset Pricing Puzzles?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 31(7‐8), pages 927-949, September.
    7. Mark C. Freeman, 2004. "Can Market Incompleteness Resolve Asset Pricing Puzzles?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 31(7-8), pages 927-949.
    8. Robert Dryburgh, 2003. "Individual, Illegal, and Unjust Purposes`: Overseers, Incentives, and the Old Poor Law in Bolton, 1820-1837," Oxford Economic and Social History Working Papers _050, University of Oxford, Department of Economics.
    9. Callan, Tim & Doorley, Karina & McTague, Alyvia, 2020. "Top Incomes in Ireland: Reconciling Evidence from Tax Records and Household Survey Data," IZA Discussion Papers 13585, Institute of Labor Economics (IZA).
    10. Jacob Weisdorf & Paul Sharp, 2009. "From preventive to permissive checks: the changing nature of the Malthusian relationship between nuptiality and the price of provisions in the nineteenth century," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 3(1), pages 55-70, January.
    11. Daudin, Guillaume, 2010. "Domestic Trade and Market Size in Late-Eighteenth-Century France," The Journal of Economic History, Cambridge University Press, vol. 70(3), pages 716-743, September.
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