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Top income measurement and undistributed profits

Author

Listed:
  • Pablo Gutierrez
  • Ramon E. Lopez
  • Eugenio Figueroa

Abstract

Using retained profits, instead of realized capital gains, by simply adding them to the shareholders’ other sources of income is shown to be in general incorrect. We provide a methodology to include undistributed profits as part of the income of the top echelons of the distribution.

Suggested Citation

  • Pablo Gutierrez & Ramon E. Lopez & Eugenio Figueroa, 2014. "Top income measurement and undistributed profits," Working Papers wp395, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp395
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    References listed on IDEAS

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    1. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
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    11. Ramón E. López & Eugenio Figueroa B. & Pablo Gutiérrez C., 2013. "La ‘parte del león’: Nuevas estimaciones de la participación de los súper ricos en el ingreso de Chile," Working Papers wp379, University of Chile, Department of Economics.
    12. Mervyn A. King, 1974. "Taxation and the Cost of Capital," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(1), pages 21-35.
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    Cited by:

    1. Javier Cortés Orihuela & Juan D. Díaz & Pablo Gutiérrez Cubillos & Pablo A. Troncoso & Gabriel I. Villarroel, 2024. "Intergenerational earnings mobility in Chile: the tale of the upper tail," Empirical Economics, Springer, vol. 67(5), pages 2411-2447, November.
    2. Ramón E. López & Eugenio Figueroa B. & Pablo Gutiérrez C., 2016. "Fundamental accrued capital gains and the measurement of top incomes: an application to Chile," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(4), pages 379-394, December.
    3. Javier Cortes Orihuela & Juan D. Díaz & Pablo Gutiérrez Cubillos & Pablo A. Troncoso, 2023. "Intergenerational earnings persistence and the provision of public goods: evidence from chile’s constitutional process," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 21(1), pages 47-81, March.
    4. Pablo Gutiérrez Cubillos, 2022. "Gini and undercoverage at the upper tail: a simple approximation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(2), pages 443-471, April.
    5. Díaz, Juan D. & Gutiérrez Cubillos, Pablo & Tapia Griñen, Pablo, 2021. "The exponential Pareto model with hidden income processes: Evidence from Chile," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 561(C).

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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