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Journal Article

"Tax the Rich"? The Financial Crisis, Fiscal Fairness, and Progressive Income Taxation

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Limberg,  Julian
Projekte von Gastwissenschaftlern und Postdoc-Stipendiaten, MPI for the Study of Societies, Max Planck Society;
Geschwister Scholl Institute of Political Science, Ludwig Maximilian University of Munich, Munich, Germany;

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EPSR_11_2019_Limberg.pdf
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Citation

Limberg, J. (2019). "Tax the Rich"? The Financial Crisis, Fiscal Fairness, and Progressive Income Taxation. European Political Science Review, 11(3), 319-336. doi:10.1017/S1755773919000183.


Cite as: http://hdl.handle.net/21.11116/0000-0005-9A63-E
Abstract
Has the financial crisis influenced taxes on the rich? In this article, I argue that crisis countries have raised income tax progressivity because of fiscal fairness considerations. I test this claim by analysing a new data set on top marginal personal income tax (PIT) rates for 122 countries from 2006 to 2014, applying matching methods and a difference-in-differences design. The results show that countries with a financial crisis have increased top PIT rates by 4 percentage points. Furthermore, rising public debt only leads to higher top PIT rates when it is crisis-induced. These findings demonstrate that notions of fiscal fairness can still shape progressive taxation in the 21st century.