uu.seUppsala University Publications
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Essays on Income Taxation and Wealth Inequality
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2017 (English)Doctoral thesis, monograph (Other academic)
Description
Abstract [en]

This thesis is concerned with inequality, redistribution and taxation, in particular the taxation of labour income and the distribution of wealth. Most of the analysis is focused on Sweden. The thesis consists of four self-contained essays.

Essay 1: “Analyzing tax reforms using the Swedish Labour Income Microsimulation Model”. Labour income taxation is a central policy topic because labour income makes up the majority of national income and most taxes are in the end taxes on labour. In order to quantify how behavioural responses of labour income earners affect tax revenue, the Swedish Labour Income Microsimulation Model (SLIMM) is constructed and used to evaluate tax reforms. Elasticities are calibrated to match midpoints of estimates found in the quasiexperimental literature. The simulations indicate that the earned income tax credit has increased employment by 128,000 and has a degree of self-financing of 21 percent. Almost half of the revenue increase from higher municipal tax rates would disappear due to behavioural responses. Tax cuts for the richest fifth of working Swedes are completely self-financing.

Essay 2: “The Laffer curve for high incomes”. An expression for the Laffer curve for high incomes is derived, assuming a constant Pareto parameter and elasticity of taxable income. Microsimulations using Swedish population data show that the simulated curve matches the theoretically derived Laffer curve well, suggesting that the analytical expression is not too much of a simplification. A country-level dataset of top effective marginal tax rates and Pareto parameters is assembled. This is used to draw Laffer curves for 27 OECD countries. Revenue-maximizing tax rates and degrees of self-financing for a small tax cut are also computed. The results indicate that degrees of self-financing range between 28 and 195 percent. Five countries have higher tax rates than the peak of the Laffer curve.

Essay 3: “Political preferences for redistribution in Sweden” (with Spencer Bastani). We examine preferences for redistribution inherent in Swedish tax policy 1971–2012 using the inverse optimal tax approach. The income distribution is carefully characterized with the help of administrative register data and we employ behavioral elasticities reflecting the perceived distortionary effects of taxation. The revealed social welfare weights are high for non-workers, small for low-income earners, and hump-shaped around the median. At the top, they are always negative, especially so during the high-tax years of the 1970s and ’80s. The weights on non-workers increased sharply in the 1970s, fell drastically in the late ’80s and early ’90s, and have since then increased.

Essay 4: “Wealth inequality in Sweden: What can we learn from capitalized income data?” (with Daniel Waldenström). This paper presents new estimates of wealth inequality in Sweden during 2000–2012, linking wealth register data up to 2007 and individually capitalized wealth based on income and property tax registers for the period thereafter when a repeal of the wealth tax stopped the collection of individual wealth statistics. We find that wealth inequality increased after 2007 and that more unequal bank holdings and housing appear to be important drivers. We also evaluate the performance of the capitalization method by contrasting its estimates and their dispersion with observed stocks in register data up to 2007. The goodness-of-fit varies tremendously across assets and we conclude that although capitalized wealth estimates may well approximate overall inequality levels and trends, they are highly sensitive to assumptions and the quality of the underlying data sources.

Place, publisher, year, edition, pages
Uppsala: Department of Economics, Uppsala University , 2017. , 173 p.
Series
Economic studies, ISSN 0283-7668 ; 172
Keyword [en]
public economics, income taxation, wealth inequality, Laffer curve, redistribution, microsimulation
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:uu:diva-328153ISBN: 978-91-85519-79-8 (print)OAI: oai:DiVA.org:uu-328153DiVA: diva2:1134492
Public defence
2017-10-06, Hörsal 2, Ekonomikum, Kyrkogårdsgatan 10, Uppsala, 13:15 (English)
Opponent
Supervisors
Available from: 2017-09-14 Created: 2017-08-20 Last updated: 2017-09-14

Open Access in DiVA

fulltext(277 kB)467 downloads
File information
File name FULLTEXT01.pdfFile size 277 kBChecksum SHA-512
6a47645f1985dafb02394213a473e72d6d04917c2ca53e1a4bdbcd1ddf463c41f7ee876e93ab504b1fdd9ba1b03e98fa1c5752db67b2757ae925581aa6fa2c1c
Type fulltextMimetype application/pdf

Search in DiVA

By author/editor
Lundberg, Jacob
By organisation
Department of Economics
Economics

Search outside of DiVA

GoogleGoogle Scholar
Total: 467 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 139 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf