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Monday, February 14, 2022

The Financial Penalties Of Main Tax Cuts For The Wealthy: Larger Revenue Inequality, No Important Impact On Financial Progress Or Unemployment

David Hope (King’s Faculty London; Google Scholar) & Julian Limberg (King’s Faculty London; Google Scholar), The Financial Penalties of Main Tax Cuts for the Wealthy, 20 Soc.-Econ. Rev. ___ (2022):

The final 50 years has seen a dramatic decline in taxes on the wealthy throughout the superior democracies. There’s nonetheless fervent debate in each political and educational circles, nevertheless, concerning the financial penalties of this sweeping change in tax coverage. This text contributes to this debate by using a newly constructed indicator of taxes on the wealthy to establish all situations of main tax reductions on the wealthy in 18 Organisation for Financial Co-operation and Growth (OECD) nations between 1965 and 2015. We then estimate the common results of those main tax reforms on key macroeconomic aggregates. We discover tax cuts for the wealthy result in larger earnings inequality in each the short- and medium-term. In distinction, such reforms shouldn’t have any important impact on financial progress or unemployment. Our outcomes subsequently present sturdy proof in opposition to the influential political–financial concept that tax cuts for the wealthy ‘trickle down’ to spice up the broader financial system.

Figure 2

https://taxprof.typepad.com/taxprof_blog/2022/02/the-economic-consequences-of-major-tax-cuts-for-the-rich-higher-income-inequality.html

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