Work in progress

Ongoing articles

“Income taxes and redistribution in the early twentieth century" (with Oriol Sabaté) [UNDER REVIEW]. Working paper version HERE.

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 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 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.

Methodological notes for the paper can be found HERE.

"Taxing workers through the twentieth century".

Abstract: This paper constructs and compares series of the tax burden placed on the labor income of workers in a sample of Western countries during the period 1910-1970. The series include income taxes and social contributions, and are estimated for diverse representative working households, defined in relation to the average wage in the economy. The framework follows the definitions of existing series for more recent years at the OECD’s Taxing Wages (which starts in the late 1970s) and the EuroPTax database (starting in 1958; Lynch and Weingarten, 2010). The paper is part of a bigger project which investigates the relation between tax progressivity and the rise of welfare states in five Western countries: France, Spain, Sweden, the United Kingdom, and the United States.

"The distributive effects of consumption taxes in early welfare states"  (with Oriol Sabaté).

Abstract: This paper presents estimates of the distributive effects of consumption taxes in five Western countries, during the period 1910 to 1970. With this, it aims to contribute to the debate about the welfare state and regressive taxation, by going back to this formative period. We contrast the patterns in five countries representing the different welfare state models: ‘liberal’ (United Kingdom, United States), ‘conservative’ (France), ‘social democratic’ (Sweden), and ‘southern’ (Spain).

Consumption taxes of different kinds (customs, general internal taxes, excises, fiscal monopolies, etc) are obtained from a detailed database (currently under construction). They are then imputed to an income distribution micro-database obtained from previous work (Torregrosa-Hetland and Sabaté, 2021a). The imputations are conducted using the relationship between income and spending in different products, estimated from historical household budget surveys. Distributive effects of consumption taxes are finally combined with those of personal income taxes which we have previously calculated.

"Income tax evasion and inequality in Brazil" (with Monica Calijuri and Carola Pessino).

Abstract: This paper estimates income under-reporting in the Brazilian income tax, using full taxpayer-population microdata from 2019. We follow the econometric approach of Feldman and Slemrod (2007), but modify it according to the characteristics of the Brazilian income tax: instead of charitable donations, we use medical (and educational) expenses as an indicator of taxpayer’s economic capacity. Our study provides the first microdata-based estimation of under-reporting available for a Latin American country.

We obtain three main results. First, income under-reporting of non-labour income in Brazil is considerable, particularly in rents (85%) and urban self-employment (75%) – for movable capital we estimate 27%, unsurprisingly less given that it is subject to lower taxation. Second, average under-reporting of total income is estimated at 16%, decreasing over income levels, which implies a regressive impact. Third, we estimate a tax gap of 44.7% of potential revenue, which corresponds to 2.1% of Brazil’s GDP.

“Growth, inequality and extraction in Ibero-American democratizations” (with Cristián Ducoing).

Abstract: Will democracy improve the distribution of economic welfare? Do dictatorships leave long-run legacies behind? In this paper we explore four Ibero-American countries with some common historical traits, but also different contexts: Spain, Portugal, Brazil, and Chile. The two Iberian nations suffered long periods of autocratic regime in the 20th Century, while our south American cases had relatively later and shorter dictatorships.

We intend to assess the extent to which democratization brought about improvements in societal welfare, combining indicators of inequality and economic performance. We propose the applicability of the concept of Inequality Extraction Ratio, initially suggested for ancient societies but adapted by Milanovic (2013b) to the analysis of contemporary economies. Our hypothesis is that democratizations, while probably not able to achieve reductions in inequality, could have promoted decreases in relative extraction.