Aroop Chatterjee, Léo Czajka, Amory Gethin, 24 April 2021

Many studies have investigated the dynamics of poverty and consumption in developing countries, but still little is known about the distribution of household net worth. This column documents the persistence of extreme wealth inequalities in South Africa since the end of the apartheid regime. Today, the top 10% own about 85% of total wealth and the top 0.1% own close to one third. A progressive wealth tax targeted at the richest 1% could collect the equivalent of between 1.5% and 3.5% of South Africa’s GDP, both tackling this legacy of extreme inequality and bringing additional government revenue in the wake of the COVID-19 crisis.

Enrico Rubolino, Daniel Waldenström, 13 April 2017

The link between tax progressivity and the income distribution is the subject of intense debate. This column presents new evidence from tax reforms during the 1980s and 1990s to examine how reduced progressivity affects top income shares. Reduced progressivity boosted top incomes, particularly for those in the top 0.1% of earners. Income tax changes are therefore a plausible candidate for explaining the recent surge in income inequality.

Nezih Guner, Martin Lopez-Daneri, Gustavo Ventura, 05 October 2014

Recent calls for closing fiscal deficits have been combined with proposals to shift the tax burden and increase marginal tax rates on higher earners. This column argues that revenue-maximising tax rates for high earners in the US would be substantially higher than current rates. However, increasing tax rates for high earners would not raise much additional revenue.

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