Income tax progressivity and inflation during the world wars
(2022) In European Review of Economic History 26(3). p.311-339- Abstract
- This paper studies the impact of inflation on income taxes in Sweden, the UK, and the United States during the world wars. As tax reforms were rising top marginal rates and reducing exemption thresholds, extraordinary levels of inflation eroded the real value of exemptions, brackets, and deductions. The micro-simulation of actual and alternative scenarios shows that inflation made the tax less progressive, particularly in Sweden during World War I and the UK during World War II. Nevertheless, its redistributive effect increased due to the related growth in tax revenue. Inflation contributed to transform a “class tax’’ into a “mass tax”.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/5300d9e5-df47-48a2-8d5e-29406b90fff3
- author
- Torregrosa Hetland, Sara LU and Sabaté, Oriol
- organization
- publishing date
- 2022-08-01
- type
- Contribution to journal
- publication status
- published
- subject
- in
- European Review of Economic History
- volume
- 26
- issue
- 3
- article number
- 26(3)
- pages
- 29 pages
- publisher
- Oxford University Press
- external identifiers
-
- scopus:85136466704
- ISSN
- 1474-0044
- DOI
- 10.1093/ereh/heab020
- 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
- 5300d9e5-df47-48a2-8d5e-29406b90fff3
- date added to LUP
- 2021-11-08 20:17:35
- date last changed
- 2023-02-24 13:54:30
@article{5300d9e5-df47-48a2-8d5e-29406b90fff3,
abstract = {{This paper studies the impact of inflation on income taxes in Sweden, the UK, and the United States during the world wars. As tax reforms were rising top marginal rates and reducing exemption thresholds, extraordinary levels of inflation eroded the real value of exemptions, brackets, and deductions. The micro-simulation of actual and alternative scenarios shows that inflation made the tax less progressive, particularly in Sweden during World War I and the UK during World War II. Nevertheless, its redistributive effect increased due to the related growth in tax revenue. Inflation contributed to transform a “class tax’’ into a “mass tax”.}},
author = {{Torregrosa Hetland, Sara and Sabaté, Oriol}},
issn = {{1474-0044}},
language = {{eng}},
month = {{08}},
number = {{3}},
pages = {{311--339}},
publisher = {{Oxford University Press}},
series = {{European Review of Economic History}},
title = {{Income tax progressivity and inflation during the world wars}},
url = {{http://dx.doi.org/10.1093/ereh/heab020}},
doi = {{10.1093/ereh/heab020}},
volume = {{26}},
year = {{2022}},
}