Calendrier du 03 décembre 2019
Paris Trade Seminar
Du 03/12/2019 de 14:45 à 16:15
Sciences Po, 28 rue des Saints-Pères, 75007 Paris (M° Saint Germain des Prés), SALLE H 402
MRAZOVA Monika (U. Geneva)
IO for Export(s)
écrit avec J. Peter Neary
Texte intégral
Applied Economics Lunch Seminar
Du 03/12/2019 de 12:30 à 13:30
Salle R2-01, Campus Jourdan, 48 boulevard Jourdan, 75014 Paris
GUILLAUD Elvire (Université Paris 1 Panthéon-Sorbonne)
The Law of Rank
écrit avec Michaël Zemmour (U Paris 1 Pantheon Sorbonne, CES & Sciences Po, LIEPP)
In comparing tax systems across developed countries, scholars generally stress differences. However, we point to a relationship common to all countries when we consider the link between tax rates and income percentile rather than the link between tax rates and income level. Across all countries, this relationship is (1) remarkably linear, (2) with a uniform slope of 3%. The additional tax that one has to pay when climbing in the income ladder is therefore the same everywhere. We call this common shape of taxation the ’Law of rank’. We establish this stylized fact for 22 OECD countries over 17 years, using LIS dataset supplemented with OECD tax data. Combined with the different pretax income distributions and the various average tax rates across developed economies, this ’Law of rank’ has important theoretical implications, as it allows us to predict the well-known properties of existing tax schedules: (i) Local progressivity in taxation is higher when income inequality is low (i.e. when the gap in income from one fractile to the next is small); (ii) Marginal tax rates are increasing in income, before to decrease for top incomes in every country – yet at different paces; (iii) Global pro- gressivity in taxation (Kakwani disproportionality measure) decreases with the country average tax rate.