International Tax and Public Finance

, Volume 26, Issue 3, pp 457–485 | Cite as

Trends and gradients in top tax elasticities: cross-country evidence, 1900–2014

  • Enrico Rubolino
  • Daniel WaldenströmEmail author


We construct a cross-country dataset spanning 1900–2014 to estimate the tax elasticity of top incomes. Our results show that top tax elasticities vary tremendously over time; they were medium to low before 1950, dropped to almost zero during the postwar era and increased to unprecedented levels since 1980. We document a marked income gradient of increasing tax responsiveness at the top. Tax avoidance, especially income shifting between wage and capital income, appears to be one important driver of these patterns. Wars, financial crises, and country-specific effects and trends also have a bearing on top elasticities.


Economic history Income inequality Taxation 

Jel Classification

D31 H21 H24 H26 N40 



We would like to thank an anonymous referee, Thomas Piketty and Jakob Egholt Sogaard for comments and the Swedish Science Council for financial support.

Supplementary material

10797_2018_9524_MOESM1_ESM.pdf (311 kb)
Supplementary material 1 (pdf 311 KB)


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Institute for Social and Economic Research (ISER)University of EssexColchesterUK
  2. 2.Research Institute of Industrial Economics and Paris School of Economics, CEPR and IZAParisFrance

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