Issues with the Current Uneven Income Distributions

2020 ◽  
pp. 201-205
Author(s):  
Vito Tanzi
Keyword(s):  
Income Distribution ◽  
Intellectual Capital ◽  
Tax Rates ◽  
Total Income ◽  
Labour Unions ◽  
Income Distributions ◽  
Communications Technologies ◽  
Marginal Tax Rates ◽  
New Knowledge

Partly as a result of deregulation, cuts in marginal tax rates, globalization, the rise in importance of intellectual capital (combined with new communications technologies), the reduced power of labour unions, and more trust in the role of the market in determining some large compensations for CEOs, in recent decades there have been important changes in the distribution of incomes. Individuals in the top one, or 0.1 of the income distribution have been appropriating large shares of the growth of total income, while the majority of the population has seen their income stagnate. This has created resentment, and diminishing trust in the market and also in democratic institutions. We may be at a crossroads where, as in the 1920s, something will need to change. Keynes then called for “new knowledge.” The need for new knowledge seems to be equally acute now. That new knowledge should hopefully be “as simple as possible.”

Higher Taxes at the Top: The Role of Entrepreneurs

2021 ◽  
Vol 13 (3) ◽  
pp. 1-36
Author(s):  
Bettina Brüggemann
Keyword(s):  
Income Distribution ◽  
Income Tax ◽  
Tax Rates ◽  
Welfare Gains ◽  
Marginal Tax Rate ◽  
Tax Rate ◽  
Long Run ◽  
Marginal Tax Rates

This paper computes optimal top marginal tax rates in Bewley-Huggett-Aiyagari–type economies that include entrepreneurs. Consistent with the data, entrepreneurs are overrepresented at the top of the income distribution and are thus disproportionately affected by an increase in the top marginal income tax rate. The top marginal tax rate that maximizes welfare is 60 percent. While average welfare gains are positive and similar across occupations along the transition, they are larger for entrepreneurs than for workers in the long run, and this occupational gap in welfare gains after the tax increase widens with increasing income. (JEL D11, D21, D31, H21, H24, L26)

scholarly journals THE IMPACT OF TAX POLICY ON ECONOMIC GROWTH, INCOME DISTRIBUTION, AND ALLOCATION OF TAXES

2006 ◽  
Vol 23 (2) ◽  
pp. 28-52 ◽  
Author(s):  
James D. Gwartney ◽  
Robert A. Lawson
Keyword(s):  
Economic Growth ◽  
Income Distribution ◽  
Income Tax ◽  
Tax Rates ◽  
Personal Income Tax ◽  
Income Groups ◽  
Marginal Tax Rates ◽  
Tax Changes ◽  
The Impact ◽  
Distribution Of Income

Using a sample of seventy-seven countries, this paper focuses on marginal tax rates and the income thresholds at which they apply to examine how the tax changes of the 1980s and 1990s have influenced economic growth, the distribution of income, and the share of taxes paid by various income groups. Many countries substantially reduced their highest marginal rates during the 1985-1995 period. The findings indicate that countries that reduced their highest marginal rates grew more rapidly than those that maintained high marginal rates. At the same time, the income distribution in several of the tax cutting countries became more unequal while there was little change or even a reduction in income inequality in most countries that maintained high marginal rates. Finally, the evidence suggests that there was a shift in the payment of the personal income tax away from those with low and middle incomes and toward those with the highest incomes.

Inequality: traditional drivers and the role of union power

2019 ◽  
Vol 72 (1) ◽  
pp. 25-58 ◽  
Author(s):  
Florence Jaumotte ◽  
Carolina Osorio Buitron
Keyword(s):  
Instrumental Variable ◽  
Technological Progress ◽  
Union Density ◽  
Tax Rates ◽  
Net Income ◽  
Omitted Variables ◽  
Financial Deregulation ◽  
Advanced Economies ◽  
Marginal Tax Rates

Abstract We examine the factors explaining the increase in gross and net income inequality in advanced economies since the 1980s. Our results support the view that globalization, technological progress, financial deregulation and lower top marginal tax rates are associated with higher inequality, and we find that the relation between the decline in union density and the rise in top decile income shares—a phenomenon which labour economists have long been discussing—is widespread across advanced economies. The influence of union density on top income shares appears to be causal, as evidenced by our instrumental variable estimates and the inclusion of potentially omitted variables.

Theoretical essence and component structure of the intellectual capital of the enterprise

2021 ◽  
pp. 10-19
Author(s):  
O. O. Punda ◽  
D. A. Arziantseva ◽  
N. P. Zakharkevych
Keyword(s):  
Intellectual Capital ◽  
Intangible Asset ◽  
Relational Capital ◽  
Sustainable Competitive Advantage ◽  
Organizational Capital ◽  
Component Structure ◽  
Stage Of Development ◽  
New Knowledge ◽  
Current Stage

The objective necessity and feature of the current stage of development of society is the creation of conditions for the formation and development of intellectual capital — a component that facilitates the transition to an innovative digital economy. Based on the study of scientific works of foreign scientists, the content of the category “intellectual capital” is determined, its component structure is investigated, which includes human capital, organizational capital and relations capital (relational capital). The legal bases of formation and disposal of intellectual capital through the use of separate contractual constructions are considered. It is determined that such agreements can be classified according to the criterion of the role played by this agreement in the structure of formation or use (disposal) of intellectual capital of the enterprise. It is proposed to define the intellectual capital of the enterprise as an intangible asset of the business entity formed on the basis of interaction of human, emotional, structural, organizational capital and capital relations, the synthesis of which allows to produce new knowledge, stimulates innovative development and enhances its competitiveness. Intellectual capital has been established to help organizations gain a sustainable competitive advantage, serving as a source of efficiency, value growth and business capitalization. The role of “green” intellectual capital as the basis for promoting sustainability in organizations is emphasized, its components and values for ensuring the effectiveness of activities are determined. The need for further research on the issues of assessing and identifying the possibilities of accounting for the value of the form of intellectual capital, including green intellectual capital, determining its impact on the results of the enterprise was emphasized.

scholarly journals Land Tenure and Farmers Income Distribution (Case Temon and Keduang Watershed)

2004 ◽  
Vol 16 (2) ◽  
Author(s):  
S Andi Cahyono ◽  
Nana Haryanti
Keyword(s):  
Income Distribution ◽  
Land Tenure ◽  
Household Income ◽  
Agricultural Sector ◽  
Survey Method ◽  
Total Income ◽  
Land Access ◽  
Growth Development ◽  
Farmer Income

Land authority and imbalance of income distribution are always be an interesting issue for an importance role of land in society. It is interesting and necessary to find out how contribution of agricultural sector to farmer income and what effect of land authority imbalance to income distribution. This research was conducted at Temon and Keduang sub watershed. Survey method was adapted to collect the field data. Afterward, the collected data was analyzed quantitatively. The result indicated that the contribution of agricultural sector to farmer income at Temon sub watershed (69.39%) was hhigher than at Keduang sub watershed (59.11%). This showed that narrow in land authority will be increasing the contribution of agricultural sector to total income. It related to diversify efforts of land using. Imbalance of land authority not always affected the income imbalance, caused by development of non agricultural sector. Land access only was unfeasible to be an indicator of farmers household income level without considering the biophysics condition and non agricultural sector growth development.

scholarly journals Scaling of urban income inequality in the USA

2021 ◽  
Vol 18 (181) ◽  
pp. 20210223
Author(s):  
Elisa Heinrich Mora ◽  
Cate Heine ◽  
Jacob J. Jackson ◽  
Geoffrey B. West ◽  
Vicky Chuqiao Yang ◽  
...  
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
City Size ◽  
Housing Cost ◽  
Scaling Analysis ◽  
Total Income ◽  
Income Distributions ◽  
City Population ◽  
Leibler Divergence ◽  
Urban Scaling

Urban scaling analysis, the study of how aggregated urban features vary with the population of an urban area, provides a promising framework for discovering commonalities across cities and uncovering dynamics shared by cities across time and space. Here, we use the urban scaling framework to study an important, but under-explored feature in this community—income inequality. We propose a new method to study the scaling of income distributions by analysing total income scaling in population percentiles. We show that income in the least wealthy decile (10%) scales close to linearly with city population, while income in the most wealthy decile scale with a significantly superlinear exponent. In contrast to the superlinear scaling of total income with city population, this decile scaling illustrates that the benefits of larger cities are increasingly unequally distributed. For the poorest income deciles, cities have no positive effect over the null expectation of a linear increase. We repeat our analysis after adjusting income by housing cost, and find similar results. We then further analyse the shapes of income distributions. First, we find that mean, variance, skewness and kurtosis of income distributions all increase with city size. Second, the Kullback–Leibler divergence between a city’s income distribution and that of the largest city decreases with city population, suggesting the overall shape of income distribution shifts with city population. As most urban scaling theories consider densifying interactions within cities as the fundamental process leading to the superlinear increase of many features, our results suggest this effect is only seen in the upper deciles of the cities. Our finding encourages future work to consider heterogeneous models of interactions to form a more coherent understanding of urban scaling.

scholarly journals Negative Marginal Tax Rates and Heterogeneity

2010 ◽  
Vol 100 (5) ◽  
pp. 2532-2547 ◽  
Author(s):  
Philippe Choné ◽  
Guy Laroque
Keyword(s):  
Income Distribution ◽  
Important Determinant ◽  
Opportunity Costs ◽  
Tax Rates ◽  
Numerical Illustration ◽  
Optimal Tax ◽  
Marginal Tax Rates ◽  
Work Opportunity

Heterogeneity is an important determinant of the shape of optimal tax schemes. This is shown here in a model à la Mirrlees. The agents differ in their productivities and opportunity costs of work, but their labor supplies depend only on a given unidimensional combination of these two characteristics. Conditions are provided under which marginal tax rates are everywhere nonnegative. This is the case when work opportunity costs are distributed independently of income. But one can also get negative marginal tax rates, in particular at the bottom of the income distribution. A numerical illustration is given, based on UK data. (JEL H21, H24, H31, J22)

scholarly journals The Role of Universities in Consolidating Intellectual Capital and Generating New Knowledge for a Sustainable Bio-Economy

2018 ◽  
Vol 20 (49) ◽  
pp. 599 ◽  
Author(s):  
Adriana Tiron-Tudor ◽  
◽  
Cristina Silvia Nistor ◽  
Cristina Alexandrina Stefanescu ◽  
◽  
...  
Keyword(s):  
Intellectual Capital ◽  
New Knowledge

The role of inter-household transfers in mitigating the impact of economic shocks on income distribution in Indonesia

2020 ◽  
Vol 36 (3) ◽  
pp. 757-763
Author(s):  
Wisnu Winardi
Keyword(s):  
Income Distribution ◽  
Policy Instruments ◽  
Commodity Prices ◽  
Tax Rates ◽  
Economic Shocks ◽  
Long Run ◽  
The Government ◽  
Negative Impacts ◽  
The Impact

COVID-19 outbreak has triggered many economic shocks globally. In this study we estimate the role of inter-households transfer in mitigating the impacts of the outbreak on Indonesian economy using a CGE model. The result shows that commodity prices and enactment of physical distancing measures bring negative impacts on the economy. Government response by lowering direct tax rates and increasing transfer to households could not fully compensate the impacts but enlighten it slightly. Households response by increasing inter-household transfers helps the government policy, particularly in reducing the decrease of households’ income and consumption. The result indicates that inter-household transfer could be regarded as an effective instrument to improve the household income distribution quality and reduce the poverty. Regarding that, stakeholders in the economy should improve the collaborative policies to capitalize the policy instruments optimally. Furthermore, the result also indicates that household consumption is not a sustainable engine to boost the economic growth. Prioritizing consumption over saving in the long run could lead to inability of the economy to engage a self-financed investment.

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