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Progressive taxes and top income shares: A historical perspective on pre- and post-tax income concentration in Switzerland

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  • Frey, Christian
  • Schaltegger, Christoph A.

Abstract

The literature on income concentration largely focuses on pre-tax income; the current study provides new data concerning both pre- and post-tax top income shares in Switzerland, from the 1945–2012 period. Redistribution due to progressive income taxes increased until the 1970s, and since then, the highest-income households have avoided increased cantonal income taxes by taking residence in low-tax cantons. Lower-level top income groups are less mobile than the highest-level groups, but have benefited from tax policy reforms since the 1980s. Nonetheless, despite fiscal federalism, redistribution and post-tax income concentration have been exceptionally stable in Switzerland.

Suggested Citation

  • Frey, Christian & Schaltegger, Christoph A., 2016. "Progressive taxes and top income shares: A historical perspective on pre- and post-tax income concentration in Switzerland," Economics Letters, Elsevier, vol. 148(C), pages 5-9.
    • Handle: RePEc:eee:ecolet:v:148:y:2016:i:c:p:5-9
    DOI: 10.1016/j.econlet.2016.08.041
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    Cited by:

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    2. Enrico Rubolino & Daniel Waldenström, 2020. "Tax progressivity and top incomes evidence from tax reforms," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(3), pages 261-289, September.
    3. Mario Morger & Christoph A. Schaltegger, 2018. "Income tax schedule and redistribution in direct democracies – the Swiss case," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(3), pages 413-438, September.
    4. Fabrizio Santoro & Ronald Waiswa, 2024. "How to improve tax compliance by wealthy individuals? Evidence from Uganda," Development Policy Review, Overseas Development Institute, vol. 42(2), March.
    5. Gupta, Sanjeev & Jalles, João Tovar, 2022. "Do tax reforms affect income distribution? Evidence from developing countries," Economic Modelling, Elsevier, vol. 110(C).
    6. Feld, Lars P. & Frey, Christian & Schaltegger, Christoph A. & Schmid, Lukas A., 2021. "Fiscal federalism and income inequality: An empirical analysis for Switzerland," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 463-494.
    7. Foellmi, Reto & Martinez, Isabel Z., 2017. "Die Verteilung von Einkommen und Vermögen in der Schweiz [The Distribution of Income and Wealth in Switzerland]," MPRA Paper 84443, University Library of Munich, Germany.

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    More about this item

    Keywords

    Inequality; Income concentration; Redistribution; Top income; Personal taxation; Switzerland;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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