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Taxation and the Superrich

Florian Scheuer () and Joel Slemrod ()

No 7817, CESifo Working Paper Series from CESifo

Abstract: This paper addresses the modern optimal tax progressivity literature, which clarifies the key role of the behavioral response to taxation and accounts for the incomes of the superrich being qualitatively different than others. Some may be “superstars,” for whom small differences in talent are magnified into much larger earnings differences, while others may work in winner-take-all markets, such that their effort to climb the ladder of success reduces the returns to others. We stress that pivotal tax-rate elasticities are not structural parameters, and will be smaller the broader and less plastic is the tax base and the more effective is the enforcement of tax evasion. For this reason, normative analysis of tax rates should be accompanied by attention to the tax base, with special attention to capital gains, which comprise a large fraction of the taxable income of the superrich.

Keywords: superrich; tax systems; superstars; winter-take-all markets; plasticity of taxable income; wealth taxes (search for similar items in EconPapers)
JEL-codes: E60 H20 J30 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-law, nep-pbe, nep-pol and nep-pub
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Working Paper: Taxation and the Superrich (2019) Downloads
Working Paper: Taxation and the Superrich (2019) Downloads
Working Paper: Taxation and the superrich (2019) Downloads
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