Fixed-k Tail Regression: New Evidence on Tax and Wealth Inequality from Forbes 400
We develop a novel fixed-k tail regression method that accommodates the unique feature in
the Forbes 400 data that observations are truncated from below at the 400th largest order
statistic. Applying this method, we find that higher maximum marginal income tax rates
induce higher wealth Pareto exponents. Setting the maximum tax rate to 30-40%(as in US
currently) leads to a Pareto exponent of 1.5-1.8, while counterfactually setting it to 80%(as
suggested by Piketty, 2014) would lead to a Pareto exponent of 2.6. We present a simple …
the Forbes 400 data that observations are truncated from below at the 400th largest order
statistic. Applying this method, we find that higher maximum marginal income tax rates
induce higher wealth Pareto exponents. Setting the maximum tax rate to 30-40%(as in US
currently) leads to a Pareto exponent of 1.5-1.8, while counterfactually setting it to 80%(as
suggested by Piketty, 2014) would lead to a Pareto exponent of 2.6. We present a simple …
We develop a novel fixed-k tail regression method that accommodates the unique feature in the Forbes 400 data that observations are truncated from below at the 400th largest order statistic. Applying this method, we find that higher maximum marginal income tax rates induce higher wealth Pareto exponents. Setting the maximum tax rate to 30-40% (as in U.S. currently) leads to a Pareto exponent of 1.5-1.8, while counterfactually setting it to 80% (as suggested by Piketty, 2014) would lead to a Pareto exponent of 2.6. We present a simple economic model that explains these findings and discuss the welfare implications of taxation.
arxiv.org
以上显示的是最相近的搜索结果。 查看全部搜索结果