EconPapers    
Economics at your fingertips  
 

Income tax and war inflation: was the ‘blood tax’ compensated by taxing the rich?

Sara Torregrosa Hetland () and Oriol Sabaté
Additional contact information
Sara Torregrosa Hetland: Lund University
Oriol Sabaté: Lund University

No 18010, Working Papers from Economic History Society

Abstract: "Major warfare and mass mobilization during the two World Wars have been associated to increasing top rates in income taxes in most Western countries, which points towards increases in their progressivity. We argue, however, that this war‐ related effect is less clear‐cut than previously thought. Wartime inflation could have exerted a counteracting impact by pushing citizens into higher tax brackets or including new individuals from the bottom of the income distribution into being taxpayers. In order to address this possibility, we study the developments in the marginal and effective tax rates over the income distribution of a sample of developed countries, both involved and neutral during World War I and World War II. Our preliminary results provide initial support to the hypothesis that inflation partially counteracted the progressive effect of increases in top marginal tax rates."

Keywords: "Taxation; Fiscal redistribution; World Wars; Bracket Creep; Progressivity; Income tax" (search for similar items in EconPapers)
JEL-codes: N00 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his
Date: 2018-04
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.ehs.org.uk/dotAsset/8706c2fa-8c55-4d40-bfa5-75177223df68.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehs:wpaper:18010

Access Statistics for this paper

More papers in Working Papers from Economic History Society Contact information at EDIRC.
Bibliographic data for series maintained by Maureen Galbraith ().

 
Page updated 2018-12-13
Handle: RePEc:ehs:wpaper:18010