Income Taxes and Redistribution in the Early Twentieth Century
(2021) In Lund Papers in Economic history- Abstract
- This paper studies the developments in the income taxes of Sweden, the United Kingdom, and the United States during the first half of the twentieth century. We present the evolution of marginal and average effective tax rates, number of taxpayers, and income tax due over the whole income distribution, and calculate the corresponding indices of progressivity and redistribution.
Our results show that redistribution through the income tax increased during the period, but with varying intensity and mechanisms. During World War I this was a joint effect of increases in the amount of revenue collected (average effective tax rate) and progressivity, whereas during World War II revenue increased again but progressivity diminished, as the tax... (More) - This paper studies the developments in the income taxes of Sweden, the United Kingdom, and the United States during the first half of the twentieth century. We present the evolution of marginal and average effective tax rates, number of taxpayers, and income tax due over the whole income distribution, and calculate the corresponding indices of progressivity and redistribution.
Our results show that redistribution through the income tax increased during the period, but with varying intensity and mechanisms. During World War I this was a joint effect of increases in the amount of revenue collected (average effective tax rate) and progressivity, whereas during World War II revenue increased again but progressivity diminished, as the tax incorporated more low- and middle-income taxpayers. The income tax in the United Kingdom was always the most redistributive of the three, and after 1945 also the one that remained most progressive. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/40b6bcfa-6b85-4e4e-8e71-bed1a3c618d1
- author
- Torregrosa Hetland, Sara LU and Sabaté, Oriol
- organization
- publishing date
- 2021
- type
- Working paper/Preprint
- publication status
- published
- subject
- keywords
- Taxation, Redistribution, Progressivity, Income tax, World Wars, H23, H24, N42, N44
- in
- Lund Papers in Economic history
- issue
- 2021:224
- pages
- 47 pages
- project
- Taxing for the welfare state: public finances and progressivity in the rise of social spending (1910-1970)
- Taxing for the welfare state: progressivity in the rise of social spending (1910-1970)
- language
- English
- LU publication?
- yes
- id
- 40b6bcfa-6b85-4e4e-8e71-bed1a3c618d1
- date added to LUP
- 2021-06-30 10:47:40
- date last changed
- 2022-10-24 14:25:55
@misc{40b6bcfa-6b85-4e4e-8e71-bed1a3c618d1, abstract = {{This paper studies the developments in the income taxes of Sweden, the United Kingdom, and the United States during the first half of the twentieth century. We present the evolution of marginal and average effective tax rates, number of taxpayers, and income tax due over the whole income distribution, and calculate the corresponding indices of progressivity and redistribution.<br/>Our results show that redistribution through the income tax increased during the period, but with varying intensity and mechanisms. During World War I this was a joint effect of increases in the amount of revenue collected (average effective tax rate) and progressivity, whereas during World War II revenue increased again but progressivity diminished, as the tax incorporated more low- and middle-income taxpayers. The income tax in the United Kingdom was always the most redistributive of the three, and after 1945 also the one that remained most progressive.}}, author = {{Torregrosa Hetland, Sara and Sabaté, Oriol}}, keywords = {{Taxation; Redistribution; Progressivity; Income tax; World Wars; H23; H24; N42; N44}}, language = {{eng}}, note = {{Working Paper}}, number = {{2021:224}}, series = {{Lund Papers in Economic history}}, title = {{Income Taxes and Redistribution in the Early Twentieth Century}}, url = {{https://lup.lub.lu.se/search/files/126601277/LUPEH_224.pdf}}, year = {{2021}}, }