Taxing the 1%: Why the top tax rate could be over 80%

Thomas Piketty, Emmanuel Saez, Stefanie Stantcheva, 8 December 2011

The top 1% of US earners now command a far higher share of the country's income than they did 40 years ago. This column looks at 18 OECD countries and disputes the claim that low taxes on the rich raise productivity and economic growth. It says the optimal top tax rate could be over 80% and no one but the mega rich would lose out.

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In the United States, the share of total pre-tax income accruing to the top 1% has more than doubled from less than 10% in the 1970s to over 20% today (CBO 2011 and Piketty and Saez 2003). A similar pattern is true of other English-speaking countries. Contrary to the widely held view, however, globalisation and new technologies are not to blame.

Topics: Poverty and income inequality, Taxation
Tags: Occupy Wall Street, US, wage inequality

Does the winner take it all? Wage inequality and exports

Dieter M. Urban, Christoph Moser, 6 September 2010

Is international trade a source of widening wage inequality in industrial countries? This column shows that export activity in Germany contributes to wage inequality among workers with different levels of skill, but diminishes wage gaps in German manufacturing between men and women and between German citizens and non-citizens.

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The theoretical case for the potential effect of trade on the distribution of income has a long and distinguished history.

Topics: International trade, Labour markets, Poverty and income inequality
Tags: exports, Germany, wage inequality

What are the real returns from a higher education?

Enrico Moretti, 3 November 2008

The increase in the return to education is typically measured using nominal wages. The author of CEPR DP6997 looks at housing costs for high school and college graduates and discovers that, when looking at real as opposed to nominal wages, the return to education and the increase in inequality may be smaller than previously thought.

Despite a large literature documenting the increase in the wage returns from a higher education over the last 30 years, the rate of growth in the number of college graduates in the US is still low relative to earlier periods.

Journalists are entitled to free DP downloads on request; please contact pressoffice@cepr.org. To learn more about subscribing to CEPR's Discussion Paper Series, please visit the CEPR website.

URL: http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=6997.asp
Topics: Education, Labour markets, Poverty and income inequality
Tags: return to education, wage inequality, well-being

Can wage inequality be explained by increasing dispersion in firm productivity?

Giulia Faggio , Kjell G. Salvanes, John Van Reenen, 25 November 2007

Much of the growing wage inequality stems from increased inequality between firms rather than within firms, suggesting inequality is driven by changes in firm-level productivity related to new technology rather than to international trade or institutions. Trade protectionism or re-energising unions may do relatively little to reverse the increase in inequality.

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Wage inequality has increased substantially in the United States and the United Kingdom in the last thirty years. This fact, which is now solidly established, fuels debate on a wide range of policy measures ranging from taxation, corporate governance and labour market institutions all the way to trade, education, and safety-net policies.

Topics: Labour markets, Productivity and Innovation
Tags: manufacturing and non-manufacturing sectors, productivity dispersion, technology, wage inequality

Offshoring may reduce income inequality in short term

Karolina Ekholm, Karen-Helene Ulltveit-Moe, 30 July 2007

In recent years, the skill premium in the US manufacturing sector is declining and the skill intensity increasing. The authors of CEPR DP6042 argue that this pattern can be linked to globalization and the rise in offshoring.

The received wisdom about the relative wages of skilled workers in the US is that the wage gap is growing as the skill intensity within industries is increasing, and these changes in wage and employment structure are often attributed to skill-based technical changes rather than to globalization and trade. Since the early 1990s, however, the pattern has been different.

Journalists are entitled to free DP downloads on request; please contact pressoffice@cepr.org. To learn more about subscribing to CEPR's Discussion Paper Series, please visit the CEPR website.

URL: http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=6402.asp
Topics: International trade
Tags: globalization, offshoring, trade, wage inequality

More incentives for employees to work longer hours in US than in Europe

Josep Pijoan-Mas, Claudio Michelacci, 28 May 2007

Since the 1970s, the number of hours worked per employee has fallen substantially in continental Europe, while it has remained roughly constant in the US. The authors of CEPR DP6314 show that this divergence in the number of hours worked per employee on the two sides of the Atlantic can be explained by the evolution of the respective labour market conditions over the last three decades.

Since the 1970s, the number of hours worked per employee has fallen substantially in continental Europe, while it has remained roughly constant in the US after reverting a trend of secular decline.

Journalists are entitled to free DP downloads on request; please contact pressoffice@cepr.org. To learn more about subscribing to CEPR's Discussion Paper Series, please visit the CEPR website.

URL: http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=6314.asp
Topics: Labour markets
Tags: human capital, search, unemployment, wage inequality, working hours

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