OECD Social, Employment and Migration Working Papers

ISSN :
1815-199X (online)
DOI :
10.1787/1815199x
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This series is designed to make available to a wider readership selected labour market, social policy and migration studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language - English or French - with a summary in the other.
 

Trends in Top Incomes and their Taxation in OECD Countries You or your institution have access to this content

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Author(s):
Michael Förster1, Ana Llena-Nozal1, Vahé Nafilyan1
Author Affiliations
  • 1: OECD, France

Publication Date
15 May 2014
Bibliographic information
No.:
159
Pages
93
DOI
10.1787/5jz43jhlz87f-en

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The shares of top income recipients in total pre-tax income have increased in OECD countries in the past three decades, particularly in most of the English-speaking countries but also in some Nordic (from low levels) and Southern European countries. Today, the richest one percent receives between 7% of all pre-tax income in Denmark and the Netherlands up to almost 20% in the United States. This increase is the result of the top 1% capturing a disproportionate share of overall income growth over the past thirty years: around 20 – 25% in Australia and the United Kingdom, up to 37% in Canada and even 47% in the United States. At the same time, tax reforms in almost all OECD countries reduced top personal income tax rates as well as rates of other taxes affecting the highest income earners. Indeed, while top tax rates were equal to or above 70% in half of the countries in the mid-1970s, this rate has been halved in many countries by 2013.
JEL Classification:
  • D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions
  • D63: Microeconomics / Welfare Economics / Equity, Justice, Inequality, and Other Normative Criteria and Measurement
  • H20: Public Economics / Taxation, Subsidies, and Revenue / General