November 2011
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A Theory of Optimal Capital Taxation Thomas Piketty, Paris School of Economics Emmanuel Saez, UC Berkeley. November 2011. Motivation: The Failure of Capital Tax Theory. 1)Standard theory: optimal tax rate τ K =0% for all forms of capital taxes (stock- or flow-based) - PowerPoint PPT Presentation
Transcript of November 2011
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A Theory of Optimal Capital Taxation
Thomas Piketty, Paris School of EconomicsEmmanuel Saez, UC BerkeleyNovember 2011
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Motivation: The Failure of Capital Tax Theory1)Standard theory: optimal tax rate K=0% for all forms of capital taxes (stock- or flow-based) Complete supression of inheritance tax, property tax, corporate tax, K income tax, etc. is desirable including from the viewpoint of individuals with zero property!
2) Practice: EU27: tax/GDP = 39%, capital tax/GDP = 9% US: tax/GDP = 27%, capital tax/GDP = 8% (inheritance tax:
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This Paper: Two IngredientsIn this paper we attempt to develop a realistic, tractable K tax theory based upon two key ingredients
1) Inheritance: life is not infinite, inheritance is a large part of aggregate wealth accumulation
2) Imperfect K markets: with uninsurable return risk, use lifetime K tax to implement optimal inheritance tax
With no inheritance (100% life-cycle wealth or infinite life) and perfect K markets, then the case for K=0% is indeed very strong: 1+r = relative price of present consumption do not tax r, instead use redistributive labor income taxation L only (Atkinson-Stiglitz)
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Key parameter: by = B/Y = aggregate annual bequest flow B/national income Y
Huge historical variations: by=20-25% in 19C & until WW1 (=very large: rentier society) byg story: g small & r>>g inherited wealth is capitalized faster than growth by high U-shaped pattern probably less pronounced in US
Optimal B is increasing with by (or r-g)
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Figure1
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0.250.40.180.35
0.250.40.290.35
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0.20.40.250.15
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0.70.50.250.15
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0.770.80.250.38
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0.770.850.20.15
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0.650.750.20.35
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0.550.60.40.35
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0.470.40.40.3
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0.450.40.40.3
0.450.40.40.3
0.450.40.40.3
0.350.40.40.3
0.350.40.450.3
U.S.
U.K.
France
Germany
Figure 1: Top Inheritance Tax Rates 1900-2011
Figure2
0000.03
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00.083333333300.03
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0.070.083333333300.03
0.070.172222208300.04
0.070.3250.020.04
0.150.4250.10.04
0.670.4250.20.04
0.770.5250.20.2
0.730.5250.50.3
0.730.60.50.4
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0.580.550.50.4
0.4350.5250.60.4
0.460.5250.720.4
0.250.50.60.4
0.250.50.30.4
0.250.50.30.4
0.250.50.33330.4
0.240.5750.33330.4
0.250.63750.33330.4
0.250.66250.33330.4
0.630.66250.36670.4
0.630.66250.36670.4
0.630.63750.30.5
0.630.63750.360.5
0.790.650.480.5
0.790.66250.51840.5
0.790.750.533320.5
0.790.8250.533320.6
0.8110.90.533320.6
0.810.9750.60.6
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0.880.9750.70.6
0.940.9750.70.6
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0.86450.9750.60.9
0.86450.9750.720.9
0.82130.9750.60.9
0.82130.9750.60.75
0.84360.9750.60.75
0.910.9750.60.75
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0.920.950.60.66
0.910.950.60.6
0.910.9250.660.53
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0.910.88750.660.53
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0.770.88750.630.53
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0.75250.91250.660.53
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U.S.
U.K.
France
Germany
Figure 2: Top Income Tax Rates 1900-2011
Figure3
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0000
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000.08333333330.0833333333
000.08333333330.0833333333
000.08333333330.0833333333
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0.070.070.08333333330.0833333333
0.070.070.17222220830.1722222083
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0.670.670.4250.425
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0.86450.86450.9750.975
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0.82130.82130.9750.975
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U.S. (earned income)
U.S. (unearned income)
U.K. (earned income)
U.K. (unearned income)
Figure 3: Top Income Tax Rates: Earned (Labor) vs Unearned (Capital)
Figure4
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0.20807016770.1813963021
0.21054078170.1844518615
0.20018939660.1596638956
0.20204236610.1716699334
0.22256423440.1977626408
0.24436789310.2327268141
0.23860913450.2311985544
0.24104896190.2333650644
0.2266302710.2034910447
0.09795617750.0703552121
0.11036391460.081257195
0.09820096990.0674029341
0.04347707540.0292828524
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0.06359985670.0565072975
0.07725355820.0673848804
0.11386252250.0997522761
0.14525069640.1263889363
20102010
Economic flow (computed from national wealth estimates, mortality tables and observed age-wealth profiles)
Fiscal flow (computed from observed bequest and gift tax data, inc. tax exempt assets)
Source: T. Piketty, "On the long-run evolution of inheritance", QJE 2011
Figure 4: Annual inheritance flow as a fraction of national income, France 1820-2008
Figure5
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0.11827518970.0870819977
0.11495059750.0788995013
0.05693407650.0383464652
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0.08590136940.064534043
0.09076668610.0806445235
0.10966702680.0956577232
0.16424549330.1438916109
0.20880510820.1816903889
20102010
Economic flow (computed from national wealth estimates, mortality tables and observed age-wealth profiles)
Fiscal flow (computed from observed bequest and gift tax data, inc. tax exempt assets)
Source: T. Piketty, "On the long-run evolution of inheritance", QJE 2011
Figure 5: Annual inheritance flow as a fraction of disposable income, France 1820-2008
DataFig1
Series used to construct figure 1: top inheritance tax rates 1900-2010
US : The top inheritance tax rate reported here includes only the federal estate tax (not the additional state-level estate and inheritance taxes). See Kopczuk and Saez (2004) for more details. Note that strictly speaking the new 35% top rate started to apply only to 2011 decedents onwards. For year 2010 decedents (repel year), there was actually no federal estate tax (but a 15% tax on capital gains did apply, though).
France: The top inheritance tax rate reported here is the top rate applying to the decedent's children. It also includes the "taxe successorale" applied in 1917-1934 (top rate with two children) and the maximum effective tax rate applied in 1927-1958. See Piketty (2001, Appendix J) for more details.
Germany: The top inheritance tax rate reported here is the top rate applying to the decedent's children. In 1946-1948 the top rate was set by the Allied Control Council. See Beckert (2008) and Dell (2008) for more details.
UK: See DataFig1(UK)
U.S.U.K.GermanyFrance
19000%8%0%2%
0%8%0%5%
0%8%0%5%
0%8%0%5%
0%8%0%5%
19050%8%0%5%
0%8%10%5%
0%15%10%5%
0%15%10%5%
0%15%10%5%
19100%15%10%7%
0%15%10%7%
0%15%10%7%
0%15%10%7%
0%20%10%7%
19150%20%10%7%
10%20%10%7%
17%20%10%18%
25%20%10%18%
25%40%35%18%
192025%40%35%29%
25%40%35%29%
25%40%15%29%
25%40%15%29%
34%40%15%29%
192540%40%15%29%
23%40%15%29%
20%40%15%25%
20%40%15%25%
20%40%15%25%
193020%50%15%25%
20%50%15%25%
35%50%15%25%
45%50%15%25%
55%50%15%25%
193563%50%15%25%
70%50%15%25%
70%50%15%25%
70%50%15%25%
70%55%15%25%
194074%65%15%25%
77%65%15%25%
77%65%15%25%
77%65%15%25%
77%65%15%25%
194577%65%15%25%
77%75%60%25%
77%75%60%25%
77%75%60%25%
77%80%38%25%
195077%80%38%25%
77%80%38%25%
77%80%38%25%
77%80%38%25%
77%80%15%25%
195577%80%15%25%
77%80%15%25%
77%80%15%25%
77%80%15%25%
77%80%15%15%
196077%80%15%15%
77%80%15%15%
77%80%15%15%
77%80%15%15%
77%80%15%15%
196577%80%15%15%
77%80%15%15%
77%80%15%15%
77%80%15%15%
77%85%15%20%
197077%85%15%20%
77%85%15%20%
77%75%15%20%
77%75%15%20%
77%75%35%20%
197577%75%35%20%
77%75%35%20%
70%75%35%20%
70%75%35%20%
70%75%35%20%
198070%75%35%20%
70%75%35%20%
65%75%35%20%
60%75%35%20%
55%60%35%40%
198555%60%35%40%
55%60%35%40%
55%60%35%40%
55%40%35%40%
55%40%35%40%
199055%40%35%40%
55%40%35%40%
55%40%35%40%
55%40%35%40%
55%40%35%40%
199555%40%35%40%
55%40%30%40%
55%40%30%40%
55%40%30%40%
55%40%30%40%
200055%40%30%40%
55%40%30%40%
50%40%30%40%
49%40%30%40%
48%40%30%40%
200547%40%30%40%
46%40%30%40%
45%40%30%40%
45%40%30%40%
45%40%30%40%
201035%40%30%40%
35%40%30%45%
DataFig1(UK)
Detailed series on UK top inheritance tax rates (data provided by A.B. Atkinson, september 2011)
Estate Duty was introduced in 1894
Estate duty was replaced in 1975 by Capital Transfer Tax, renamed in 1986 Inheritance Tax
The main sources are the Annual Reports (AR) of the Inland Revenue and Inland Revenue Statistics (IRS)
Notes
ameans tax not in operation
bData relate to tax years
cWhere change made other than at start of tax year (6 April), allocate to that year if before 6 October.
dInland Revenue is now known as HMRC.
Maximum rate of ED/CTT/IHTMaximum rate of estate dutyCapital Transfer TaxRate of Inheritance TaxSourceNotes
18948.08.0AR year ended 31 March 1936, Table 8
18958.08.0"
18968.08.0"
18978.08.0"
18988.08.0"
18998.08.0"
19008.08.0"
19018.08.0"
19028.08.0"
19038.08.0"
19048.08.0"
19058.08.0"
19068.08.0"
190715.015.0"
190815.015.0"
190915.015.0"
191015.015.0"
191115.015.0"
191215.015.0"
191315.015.0"
191420.020.0AR year ended 31 March 1949, Table 105
191520.020.0"
191620.020.0"
191720.020.0"
191820.020.0"
191940.040.0"
192040.040.0"
192140.040.0"
192240.040.0"
192340.040.0"
192440.040.0"
192540.040.0"
192640.040.0"
192740.040.0"
192840.040.0"
192940.040.0"
193050.050.0"
193150.050.0"
193250.050.0"
193350.050.0"
193450.050.0"
193550.050.0"
193650.050.0"
193750.050.0"
193850.050.0"
193955.055.0"
194065.065.0AR year ended 31 March 1951, Table 135
194165.065.0"
194265.065.0"
194365.065.0"
194465.065.0"
194565.065.0"
194675.075.0AR year ended 31 March 1969, Table 35
194775.075.0"
194875.075.0"
194980.080.0"
195080.080.0"
195180.080.0"
195280.080.0"
195380.080.0"
195480.080.0"
195580.080.0"
195680.080.0"
195780.080.0"
195880.080.0"
195980.080.0"
196080.080.0"
196180.080.0"
196280.080.0"
196380.080.0"
196480.080.0"
196580.080.0"
196680.080.0"
196780.080.0"
196880.080.0"
196985.085.0"Tax limited to 80 per cent of estate
197085.085.0AR year ended 31 March 1975, Table 23Tax limited to 80 per cent of estate
197185.085.0"Tax limited to 80 per cent of estate
197275.075.0"
197375.075.0"
197475.075.0"
197575.075.0HMRC website, Table A.8
197675.075.0"
197775.075.0"
197875.075.0"
197975.075.0"
198075.075.0"
198175.075.0"
198275.075.0"
198375.075.0"
198460.060.0"
198560.060.0"
198660.060.0IRS 2000, Table A.8
198760.060.0"
198840.040.0"
198940.040.0"
199040.040.0"
199140.040.0"
199240.040.0"
199340.040.0"
199440.040.0"
199540.040.0"
199640.040.0"
199740.040.0"
199840.040.0"
199940.040.0"
200040.040.0"
200140.040.0HMRC website, Table A.8
200240.040.0"
200340.040.0"
200440.040.0"
200540.040.0"
200640.040.0"
200740.040.0"
200840.040.0"
200940.040.0"
201040.040.0"
201140.040.0"
DataFig2
Series used to construct figure 2: top income tax rates 1900-2010
US: The top marginal income tax rate reported here includes general income tax supplements (i.e. surtaxes applying to all incomes above a certain level), but excludes all other taxes and social contributions (the uncapped rate of social security contributions on top earnings has been 2.5% since 1994 and was 0% before). Between 1971 and 1981, the top rate applying to earned income was lower than the top rate applying to ordinary unearned income (e.g. capital income). Also, between 1944 and 1963, there was a maximum top effective rate. Here we do not mention the reduced rates applying to capital gains. See Saez, Slemro and Gierz (2011, Table A1) for more details. See also Tax Policy Center website.
France: The top marginal income tax rate reported here includes general income tax supplements (i.e. surtaxes applying to all incomes above a certain level), but excludes all other taxes (e.g. corporate taxes) and social contributions (in particular, excluding the CSG, currently 8%). Between 1919 and 1958, top rates were higher for single taxpayers (e.g. during the interwar period, singles paid a 25% tax surcharge, so that the top rate was 62.5% rather than 50% in 1919-1922, 75% rather than 60% in 1923, etc.); there were also smaller tax surcharges for married taxpayers with no children after three years of marriage. All these tax surcharges were excluded here, because they apply only to a minority of top income taxpayers. For complete details about the history of income tax law in France, see Piketty 2001, Chapters 3-4.
Germany: The top marginal income tax rate reported here includes general income tax supplements (i.e. surtaxes applying to all incomes above a certain level), but excludes all other taxes and social contributions. In 1946-1948 the top rate was set by the Allied Control Council. See Dell (2008) for more details.
UK: See DataFig2(UK)
Top marginal income tax rate
U.S.U.K.GermanyFranceU.S. (top marginal rate on earned income)U.S. (top effective rate)U.K. (top marginal rate on earned income)
19000%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
19050%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%8%3%0%0%0%8%
19100%8%3%0%0%0%8%
0%8%3%0%0%0%8%
0%8%3%0%0%0%8%
7%8%3%0%7%7%8%
7%17%4%0%7%7%17%
19157%33%4%2%7%7%33%
15%43%4%10%15%15%43%
67%43%4%20%67%67%43%
77%53%20%20%77%77%53%
73%53%30%50%73%73%53%
192073%60%40%50%73%73%60%
73%60%40%50%73%73%60%
58%55%40%50%58%58%55%
44%53%40%60%44%44%53%
46%53%40%72%46%46%53%
192525%50%40%60%25%25%50%
25%50%40%30%25%25%50%
25%50%40%30%25%25%50%
25%50%40%33%25%25%50%
24%58%40%33%24%24%58%
193025%64%40%33%25%25%64%
25%66%40%33%25%25%66%
63%66%40%37%63%63%66%
63%66%40%37%63%63%66%
63%64%50%30%63%63%64%
193563%64%50%36%63%63%64%
79%65%50%48%79%79%65%
79%66%50%52%79%79%66%
79%75%50%53%79%79%75%
79%83%60%53%79%79%83%
194081%90%60%53%81%81%90%
81%98%60%60%81%81%98%
88%98%60%70%88%88%98%
88%98%60%70%88%88%98%
94%98%60%70%94%90%98%
194594%98%60%60%94%90%98%
86%98%90%60%86%86%98%
86%98%90%72%86%86%98%
82%98%90%60%82%77%98%
82%98%75%60%82%77%98%
195084%98%75%60%84%87%98%
91%98%75%60%91%87%98%
92%98%75%60%92%88%98%
92%95%66%60%92%88%95%
91%95%60%60%91%87%95%
195591%93%53%66%91%87%93%
91%93%53%66%91%87%93%
91%93%53%66%91%87%93%
91%93%53%66%91%87%93%
91%89%53%66%91%87%89%
196091%89%53%66%91%87%89%
91%89%53%63%91%87%89%
91%89%53%63%91%87%89%
91%89%53%65%91%87%89%
77%89%53%63%77%77%89%
196570%91%53%63%70%70%91%
70%91%53%65%70%70%91%
70%91%53%66%70%70%91%
75%91%53%66%75%75%91%
77%91%53%65%77%77%91%
197072%91%53%62%72%72%91%
70%89%53%61%60%70%83%
70%89%53%60%50%70%83%
70%90%53%60%50%70%75%
70%98%53%60%50%70%83%
197570%98%56%60%50%70%83%
70%98%56%60%50%70%83%
70%98%56%60%50%70%83%
70%98%56%60%50%70%83%
70%75%56%60%50%70%60%
198070%75%56%66%50%70%60%
69%75%56%66%50%69%60%
50%75%56%70%50%50%60%
50%75%56%70%50%50%60%
50%60%56%67%50%50%60%
198550%60%56%65%50%50%60%
50%60%56%58%50%50%60%
39%60%56%57%39%39%60%
28%40%56%57%28%28%40%
28%40%56%57%28%28%40%
199028%40%53%57%28%28%40%
31%40%53%57%31%31%40%
31%40%53%57%31%31%40%
40%40%53%57%40%40%40%
40%40%53%57%40%40%40%
199540%40%53%57%40%40%40%
40%40%53%54%40%40%40%
40%40%53%54%40%40%40%
40%40%53%54%40%40%40%
40%40%53%54%40%40%40%
200040%40%51%53%40%40%40%
39%40%49%53%39%39%40%
39%40%49%50%39%39%40%
35%40%49%48%35%35%40%
35%40%45%48%35%35%40%
200535%40%42%48%35%35%40%
35%40%42%40%35%35%40%
35%40%45%40%35%35%40%
35%40%45%40%35%35%40%
35%40%45%40%35%35%40%
201035%50%45%41%35%35%50%
35%50%45%41%35%35%50%
DataFig2(UK)
Detailed series on UK top income tax rates (data provided by A.B. Atkinson, september 2011)
Super-tax was introduced in 1908 and was renamed surtax with effect from 1928-9.
The income tax does not include National Insurance contributions.
No account is taken of the Special Contribution levied on investment income in 1949.
No account is taken of the Special Charge on investment income in 1968.
The investment income surcharge was abolished in 1984.
For 1971/2 and 1972/3 earned income relief (EIR) applied to all earnings; in all other years, there was a maximum.
EIR is therefore only taken into account for these years, reducing taxable earned income by 15 per cent.
Source HMRC website, table TA.1.
Tax rates refer to the year of assessment; the income subject to the tax may have arisen in a previous year.
ReferenceSabine, B E V, 1966, A history of income tax, Allen and Unwin, London.
Highest rate of tax on earned incomeHighest rate of tax on capital incomeHighest rate of income taxSourceHighest rate of surtaxSourceInvestment income surchargeSourceNotes
19098.338.335.83Sabine, pages 146-72.5AR year ended 31 March 1922, Table 738.38.3
19108.338.335.83"2.5"8.38.3
19118.338.335.83AR year ended 31 March 1922, Table 542.5"8.38.3
19128.338.335.83"2.5"8.38.3
19138.338.335.83"2.5"14.714.7
191417.2217.228.33"8.9"25.825.8
191532.5032.5015.00"17.5"32.532.5
191642.5042.5025.00"17.5"42.542.5
191742.5042.5025.00"17.5"47.547.5
191852.5052.5030.00"22.5AR year ended 31 March 1928, Table 6052.552.5
191952.5052.5030.00"22.5"60.060.0
192060.0060.0030.00AR year ended 31 March 1928, Table 4330.0"60.060.0
192160.0060.0030.00"30.0"60.060.0
192255.0055.0025.00"30.0"55.055.0
192352.5052.5022.50"30.0"52.552.5
192452.5052.5022.50"30.0"52.552.5
192550.0050.0020.00"30.0"50.050.0
192650.0050.0020.0AR year ended 31 March 1936, Table 3730.0AR year ended 31 March 1936, Table 5350.050.0
192750.0050.0020.0"30.0"50.050.0
192850.0050.0020.0"30.0"50.050.0
192957.5057.5020.0"37.5"57.557.5
193063.7563.7522.5"41.3"63.863.8
193166.2566.2525.0"41.3"66.366.3
193266.2566.2525.0"41.3"66.366.3
193366.2566.2525.0"41.3"66.366.3
193463.7563.7522.5"41.3"63.863.8
193563.7563.7522.5"41.3AR year ended 31 March 1939, Table 5463.863.8
193665.0065.0023.8AR year ended 31 March 1939, Table 3841.3"65.065.0
193766.2566.2525.0"41.3AR year ended 31 March 1949, Table 9266.366.3
193875.0075.0027.5"47.5"75.075.0
193982.5082.5035.0AR year ended 31 March 1949, Table 1947.5"82.582.5
194090.0090.0042.5"47.5AR year ended 31 March 1951, Table 11990.090.0
194197.5097.5050.0AR year ended 31 March 1951, Table 1847.5"97.597.5
194297.5097.5050.0"47.5"97.597.5
194397.5097.5050.0"47.5"97.597.5
194497.5097.5050.0"47.5"97.597.5
194597.5097.5050.0"47.5"97.597.5
194697.5097.5045.0"52.5"97.597.5
194797.5097.5045.0"52.5"97.597.5
194897.5097.5045.0"52.5"97.597.5
194997.5097.5045.0"52.5"97.597.5
195097.5097.5045.0"52.5AR year ended 31 March 1963, Table 79A97.597.5
195197.5097.5047.5AR year ended 31 March 1954, Table 1750.0"97.597.5
195297.5097.5047.5AR year ended 31 March 1963, Table 2450.0"97.597.5
195395.0095.0045.0"50.0"95.095.0
195495.0095.0045.0"50.0"95.095.0
195592.5092.5042.5"50.0"92.592.5
195692.5092.5042.5"50.0"92.592.5
195792.5092.5042.5"50.0"92.592.5
195892.5092.5042.5"50.0"92.592.5
195988.7588.7538.75AR year ended 31 March 1969, Table 3050.0AR year ended 31 March 1969, Table 3388.888.8
196088.7588.7538.75"50.0"88.888.8
196188.7588.7538.75"50.0"88.888.8
196288.7588.7538.75"50.0"88.888.8
196388.7588.7538.75"50.0"88.888.8
196488.7588.7538.75"50.0"88.888.8
196591.2591.2541.25"50.0"A surcharge of 10 per cent was charged on surtax liabilities for 1965-696.396.3
196691.2591.2541.25"50.0"91.391.3
196791.2591.2541.25"50.0"91.391.3
196891.2591.2541.25"50.0"91.391.3
196991.2591.2541.25"50.0AR year ended 31 March 1975, Table 2391.391.3
197091.2591.2541.25AR year ended 31 March 1975, Table 2250.0"91.391.3
197182.9488.7538.75"50.0"73.888.8
197282.9488.7538.75"50.0"A surcharge of 10 per cent was charged on surtax liabilities for 1972-7373.888.8
197375.0090.0075.00AR year ended 31 March 1975, Table 2315.0AR year ended 31 March 1975, Table 2375.090.0
197483.0098.0083.00"15.0"83.098.0
197583.0098.0083.00"15.0"83.098.0
197683.0098.0083.00IRS 1979, Appendix A.215.0IRS 1979, Appendix A.283.098.0
197783.0098.0083.00"15.0"83.098.0
197883.0098.0083.00"15.0"83.098.0
197960.0075.0060.00AR year ended 31 March 1980, page 215.0AR year ended 31 March 1980, page 260.075.0
198060.0075.0060.00"15.0"60.075.0
198160.0075.0060.00IRS 1984, Table A.215.0IRS 1984, Table A.260.075.0
198260.0075.0060.00"15.0"60.075.0
198360.0075.0060.00"15.0"60.075.0
198460.0060.0060.00IRS 2000, Table A.260.060.0
198560.0060.0060.00"60.060.0
198660.0060.0060.00"60.060.0
198760.0060.0060.00"60.060.0
198840.0040.0040.00"40.040.0
198940.0040.0040.00"40.040.0
199040.0040.0040.00"40.040.0
199140.0040.0040.00"40.040.0
199240.0040.0040.00"40.040.0
199340.0040.0040.00"40.040.0
199440.0040.0040.00"40.040.0
199540.0040.0040.00"40.040.0
199640.0040.0040.00"40.040.0
199740.0040.0040.00"40.040.0
199840.0040.0040.00"40.040.0
199940.0040.0040.00"40.040.0
200040.0040.0040.00"40.040.0
200140.0040.0040.00HMRC website, Table A.240.040.0
200240.0040.0040.00"40.040.0
200340.0040.0040.00"40.040.0
200440.0040.0040.00"
200540.0040.0040.00"
200640.0040.0040.00"
200740.0040.0040.00"
200840.0040.0040.00"
200940.0040.0040.00"HMRC website
201050.0050.0050.00""
201150.0050.0050.00""
DataFig3
Series used to construct figures 3a-3b: inheritance flows in France 1820-2008 (see Piketty, On the long run evolution of inheritance, 2010 working paper version, data appendix)
Bt/YtBtf/YtBt/YdtBtf/Ydt
Piketty 2010, Table A4Piketty 2010, Table B2Piketty 2010, Table B2Piketty 2010, Table B2
182020.3%18.9%21.4%19.8%
183020.8%18.1%21.9%19.1%
184021.1%18.4%22.2%19.4%
185020.0%16.0%21.1%16.8%
186020.2%17.2%21.3%18.1%
187022.3%19.8%23.4%20.8%
188024.4%23.3%25.7%24.5%
189023.9%23.1%25.1%24.3%
190024.1%23.3%25.5%24.7%
191022.7%20.3%24.0%21.5%
19209.8%7.0%10.2%7.3%
193011.0%8.1%11.8%8.7%
19409.8%6.7%11.5%7.9%
19504.3%2.9%5.7%3.8%
19605.9%3.5%7.9%4.7%
19706.2%4.6%8.6%6.5%
19806.4%5.7%9.1%8.1%
19907.7%6.7%11.0%9.6%
200011.4%10.0%16.4%14.4%
200814.5%12.6%20.9%18.2%
2010
Figure1(nn)
00.080.020
00.080.050
00.080.050
00.080.050
00.080.050
00.080.050
00.080.050.1
00.150.050.1
00.150.050.1
00.150.050.1
00.150.0650.1
00.150.0650.1
00.150.0650.1
00.150.0650.1
00.20.0650.1
00.20.0650.1
0.10.20.0650.1
0.166670.20.180.1
0.250.20.180.1
0.250.40.180.35
0.250.40.290.35
0.250.40.290.35
0.250.40.290.15
0.250.40.290.15
0.33750.40.290.15
0.40.40.290.15
0.23330.40.290.15
0.20.40.250.15
0.20.40.250.15
0.20.40.250.15
0.20.50.250.15
0.20.50.250.15
0.345830.50.250.15
0.450.50.250.15
0.545830.50.250.15
0.633330.50.250.15
0.70.50.250.15
0.70.50.250.15
0.70.50.250.15
0.70.550.250.15
0.7350.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.750.250.6
0.770.750.250.6
0.770.750.250.6
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.850.20.15
0.770.850.20.15
0.770.850.20.15
0.770.750.20.15
0.770.750.20.15
0.770.750.20.35
0.770.750.20.35
0.770.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.650.750.20.35
0.60.750.20.35
0.550.60.40.35
0.550.60.40.35
0.550.60.40.35
0.550.60.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.50.40.40.3
0.490.40.40.3
0.480.40.40.3
0.470.40.40.3
0.460.40.40.3
0.450.40.40.3
0.450.40.40.3
0.450.40.40.3
0.350.40.40.3
0.350.40.450.3
U.S.
U.K.
France
Germany
Top Inheritance Tax Rates 1900-2011
Figure2(nn)
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
00.083333333300.03
00.083333333300.03
00.083333333300.03
00.083333333300.03
0.070.083333333300.03
0.070.172222208300.04
0.070.3250.020.04
0.150.4250.10.04
0.670.4250.20.04
0.770.5250.20.2
0.730.5250.50.3
0.730.60.50.4
0.730.60.50.4
0.580.550.50.4
0.4350.5250.60.4
0.460.5250.720.4
0.250.50.60.4
0.250.50.30.4
0.250.50.30.4
0.250.50.33330.4
0.240.5750.33330.4
0.250.63750.33330.4
0.250.66250.33330.4
0.630.66250.36670.4
0.630.66250.36670.4
0.630.63750.30.5
0.630.63750.360.5
0.790.650.480.5
0.790.66250.51840.5
0.790.750.533320.5
0.790.8250.533320.6
0.8110.90.533320.6
0.810.9750.60.6
0.880.9750.70.6
0.880.9750.70.6
0.940.9750.70.6
0.940.9750.60.6
0.86450.9750.60.9
0.86450.9750.720.9
0.82130.9750.60.9
0.82130.9750.60.75
0.84360.9750.60.75
0.910.9750.60.75
0.920.9750.60.75
0.920.950.60.66
0.910.950.60.6
0.910.9250.660.53
0.910.9250.660.53
0.910.9250.660.53
0.910.9250.660.53
0.910.88750.660.53
0.910.88750.660.53
0.910.88750.630.53
0.910.88750.630.53
0.910.88750.645750.53
0.770.88750.630.53
0.70.91250.630.53
0.70.91250.650.53
0.70.91250.660.53
0.75250.91250.660.53
0.770.91250.6450.53
0.71750.91250.6180.53
0.70.88750.6120.53
0.70.88750.60.53
0.70.90.60.53
0.70.980.60.53
0.70.980.60.56
0.70.980.60.56
0.70.980.60.56
0.70.980.60.56
0.70.750.60.56
0.70.750.660.56
0.69130.750.660.56
0.50.750.69550.56
0.50.750.7020.56
0.50.60.66950.56
0.50.60.650.56
0.50.60.580.56
0.3850.60.5680.56
0.280.40.5680.56
0.280.40.5680.56
0.280.40.5680.53
0.310.40.5680.53
0.310.40.5680.53
0.3960.40.5680.53
0.3960.40.5680.53
0.3960.40.5680.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.53250.51
0.3860.40.52750.485
0.3860.40.49580.485
0.350.40.48090.485
0.350.40.48090.45
0.350.40.48090.42
0.350.40.40.42
0.350.40.40.45
0.350.40.40.45
0.350.40.40.45
0.350.50.410.45
0.350.50.410.45
U.S.
U.K.
France
Germany
Top Income Tax Rates 1900-2011
Figure3(nn)
0000
0000
0000
0000
0000
0000
0000
0000
0000
000.08333333330.0833333333
000.08333333330.0833333333
000.08333333330.0833333333
000.08333333330.0833333333
0.070.070.08333333330.0833333333
0.070.070.17222220830.1722222083
0.070.070.3250.325
0.150.150.4250.425
0.670.670.4250.425
0.770.770.5250.525
0.730.730.5250.525
0.730.730.60.6
0.730.730.60.6
0.580.580.550.55
0.4350.4350.5250.525
0.460.460.5250.525
0.250.250.50.5
0.250.250.50.5
0.250.250.50.5
0.250.250.50.5
0.240.240.5750.575
0.250.250.63750.6375
0.250.250.66250.6625
0.630.630.66250.6625
0.630.630.66250.6625
0.630.630.63750.6375
0.630.630.63750.6375
0.790.790.650.65
0.790.790.66250.6625
0.790.790.750.75
0.790.790.8250.825
0.8110.8110.90.9
0.810.810.9750.975
0.880.880.9750.975
0.880.880.9750.975
0.940.940.9750.975
0.940.940.9750.975
0.86450.86450.9750.975
0.86450.86450.9750.975
0.82130.82130.9750.975
0.82130.82130.9750.975
0.84360.84360.9750.975
0.910.910.9750.975
0.920.920.9750.975
0.920.920.950.95
0.910.910.950.95
0.910.910.9250.925
0.910.910.9250.925
0.910.910.9250.925
0.910.910.9250.925
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.770.770.88750.8875
0.70.70.91250.9125
0.70.70.91250.9125
0.70.70.91250.9125
0.75250.75250.91250.9125
0.770.770.91250.9125
0.71750.71750.91250.9125
0.60.70.8293750.8875
0.50.70.8293750.8875
0.50.70.750.9
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.60.75
0.50.70.60.75
0.50.69130.60.75
0.50.50.60.75
0.50.50.60.75
0.50.50.60.6
0.50.50.60.6
0.50.50.60.6
0.3850.3850.60.6
0.280.280.40.4
0.280.280.40.4
0.280.280.40.4
0.310.310.40.4
0.310.310.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3860.3860.40.4
0.3860.3860.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.50.5
0.350.350.50.5
U.S. (earned income)
U.S. (unearned income)
U.K. (earned income)
U.K. (unearned income)
Top Income Tax Rates: Earned (Labor) vs Unearned (Capital)
Figure4(nn)
0.20316205670.1885433655
0.20807016770.1813963021
0.21054078170.1844518615
0.20018939660.1596638956
0.20204236610.1716699334
0.22256423440.1977626408
0.24436789310.2327268141
0.23860913450.2311985544
0.24104896190.2333650644
0.2266302710.2034910447
0.09795617750.0703552121
0.11036391460.081257195
0.09820096990.0674029341
0.04347707540.0292828524
0.05852085920.0346208886
0.06189083940.0464959537
0.06359985670.0565072975
0.07725355820.0673848804
0.11386252250.0997522761
0.14525069640.1263889363
20102010
Economic flow (computed from national wealth estimates, mortality tables and observed age-wealth profiles)
Fiscal flow (computed from observed bequest and gift tax data, inc. tax exempt assets)
Source: T. Piketty, "On the long-run evolution of inheritance", QJE 2011
Annual inheritance flow as a fraction of national income, France 1820-2008
Figure5(nn)
0.21385479650.1984667005
0.21902122920.1909434759
0.22162187550.1941598542
0.21072568070.1680672585
0.21267617480.1807051931
0.23427814140.2081712009
0.25722936120.2449755938
0.251167510.2433668994
0.25482893960.2467057789
0.23958597940.2151239596
0.10229958380.0734747834
0.11827518970.0870819977
0.11495059750.0788995013
0.05693407650.0383464652
0.07936074760.0469497482
0.08590136940.064534043
0.09076668610.0806445235
0.10966702680.0956577232
0.16424549330.1438916109
0.20880510820.1816903889
20102010
Economic flow (computed from national wealth estimates, mortality tables and observed age-wealth profiles)
Fiscal flow (computed from observed bequest and gift tax data, inc. tax exempt assets)
Source: T. Piketty, "On the long-run evolution of inheritance", QJE 2011
Annual inheritance flow as a fraction of disposable income, France 1820-2008
-
Figure1
00.080.020
00.080.050
00.080.050
00.080.050
00.080.050
00.080.050
00.080.050.1
00.150.050.1
00.150.050.1
00.150.050.1
00.150.0650.1
00.150.0650.1
00.150.0650.1
00.150.0650.1
00.20.0650.1
00.20.0650.1
0.10.20.0650.1
0.166670.20.180.1
0.250.20.180.1
0.250.40.180.35
0.250.40.290.35
0.250.40.290.35
0.250.40.290.15
0.250.40.290.15
0.33750.40.290.15
0.40.40.290.15
0.23330.40.290.15
0.20.40.250.15
0.20.40.250.15
0.20.40.250.15
0.20.50.250.15
0.20.50.250.15
0.345830.50.250.15
0.450.50.250.15
0.545830.50.250.15
0.633330.50.250.15
0.70.50.250.15
0.70.50.250.15
0.70.50.250.15
0.70.550.250.15
0.7350.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.750.250.6
0.770.750.250.6
0.770.750.250.6
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.850.20.15
0.770.850.20.15
0.770.850.20.15
0.770.750.20.15
0.770.750.20.15
0.770.750.20.35
0.770.750.20.35
0.770.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.650.750.20.35
0.60.750.20.35
0.550.60.40.35
0.550.60.40.35
0.550.60.40.35
0.550.60.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.50.40.40.3
0.490.40.40.3
0.480.40.40.3
0.470.40.40.3
0.460.40.40.3
0.450.40.40.3
0.450.40.40.3
0.450.40.40.3
0.350.40.40.3
0.350.40.450.3
U.S.
U.K.
France
Germany
Figure 1: Top Inheritance Tax Rates 1900-2011
Figure2
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
00.083333333300.03
00.083333333300.03
00.083333333300.03
00.083333333300.03
0.070.083333333300.03
0.070.172222208300.04
0.070.3250.020.04
0.150.4250.10.04
0.670.4250.20.04
0.770.5250.20.2
0.730.5250.50.3
0.730.60.50.4
0.730.60.50.4
0.580.550.50.4
0.4350.5250.60.4
0.460.5250.720.4
0.250.50.60.4
0.250.50.30.4
0.250.50.30.4
0.250.50.33330.4
0.240.5750.33330.4
0.250.63750.33330.4
0.250.66250.33330.4
0.630.66250.36670.4
0.630.66250.36670.4
0.630.63750.30.5
0.630.63750.360.5
0.790.650.480.5
0.790.66250.51840.5
0.790.750.533320.5
0.790.8250.533320.6
0.8110.90.533320.6
0.810.9750.60.6
0.880.9750.70.6
0.880.9750.70.6
0.940.9750.70.6
0.940.9750.60.6
0.86450.9750.60.9
0.86450.9750.720.9
0.82130.9750.60.9
0.82130.9750.60.75
0.84360.9750.60.75
0.910.9750.60.75
0.920.9750.60.75
0.920.950.60.66
0.910.950.60.6
0.910.9250.660.53
0.910.9250.660.53
0.910.9250.660.53
0.910.9250.660.53
0.910.88750.660.53
0.910.88750.660.53
0.910.88750.630.53
0.910.88750.630.53
0.910.88750.645750.53
0.770.88750.630.53
0.70.91250.630.53
0.70.91250.650.53
0.70.91250.660.53
0.75250.91250.660.53
0.770.91250.6450.53
0.71750.91250.6180.53
0.70.88750.6120.53
0.70.88750.60.53
0.70.90.60.53
0.70.980.60.53
0.70.980.60.56
0.70.980.60.56
0.70.980.60.56
0.70.980.60.56
0.70.750.60.56
0.70.750.660.56
0.69130.750.660.56
0.50.750.69550.56
0.50.750.7020.56
0.50.60.66950.56
0.50.60.650.56
0.50.60.580.56
0.3850.60.5680.56
0.280.40.5680.56
0.280.40.5680.56
0.280.40.5680.53
0.310.40.5680.53
0.310.40.5680.53
0.3960.40.5680.53
0.3960.40.5680.53
0.3960.40.5680.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.53250.51
0.3860.40.52750.485
0.3860.40.49580.485
0.350.40.48090.485
0.350.40.48090.45
0.350.40.48090.42
0.350.40.40.42
0.350.40.40.45
0.350.40.40.45
0.350.40.40.45
0.350.50.410.45
0.350.50.410.45
U.S.
U.K.
France
Germany
Figure 2: Top Income Tax Rates 1900-2011
Figure3
0000
0000
0000
0000
0000
0000
0000
0000
0000
000.08333333330.0833333333
000.08333333330.0833333333
000.08333333330.0833333333
000.08333333330.0833333333
0.070.070.08333333330.0833333333
0.070.070.17222220830.1722222083
0.070.070.3250.325
0.150.150.4250.425
0.670.670.4250.425
0.770.770.5250.525
0.730.730.5250.525
0.730.730.60.6
0.730.730.60.6
0.580.580.550.55
0.4350.4350.5250.525
0.460.460.5250.525
0.250.250.50.5
0.250.250.50.5
0.250.250.50.5
0.250.250.50.5
0.240.240.5750.575
0.250.250.63750.6375
0.250.250.66250.6625
0.630.630.66250.6625
0.630.630.66250.6625
0.630.630.63750.6375
0.630.630.63750.6375
0.790.790.650.65
0.790.790.66250.6625
0.790.790.750.75
0.790.790.8250.825
0.8110.8110.90.9
0.810.810.9750.975
0.880.880.9750.975
0.880.880.9750.975
0.940.940.9750.975
0.940.940.9750.975
0.86450.86450.9750.975
0.86450.86450.9750.975
0.82130.82130.9750.975
0.82130.82130.9750.975
0.84360.84360.9750.975
0.910.910.9750.975
0.920.920.9750.975
0.920.920.950.95
0.910.910.950.95
0.910.910.9250.925
0.910.910.9250.925
0.910.910.9250.925
0.910.910.9250.925
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.770.770.88750.8875
0.70.70.91250.9125
0.70.70.91250.9125
0.70.70.91250.9125
0.75250.75250.91250.9125
0.770.770.91250.9125
0.71750.71750.91250.9125
0.60.70.8293750.8875
0.50.70.8293750.8875
0.50.70.750.9
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.60.75
0.50.70.60.75
0.50.69130.60.75
0.50.50.60.75
0.50.50.60.75
0.50.50.60.6
0.50.50.60.6
0.50.50.60.6
0.3850.3850.60.6
0.280.280.40.4
0.280.280.40.4
0.280.280.40.4
0.310.310.40.4
0.310.310.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3860.3860.40.4
0.3860.3860.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.50.5
0.350.350.50.5
U.S. (earned income)
U.S. (unearned income)
U.K. (earned income)
U.K. (unearned income)
Figure 3: Top Income Tax Rates: Earned (Labor) vs Unearned (Capital)
Figure4
0.20316205670.1885433655
0.20807016770.1813963021
0.21054078170.1844518615
0.20018939660.1596638956
0.20204236610.1716699334
0.22256423440.1977626408
0.24436789310.2327268141
0.23860913450.2311985544
0.24104896190.2333650644
0.2266302710.2034910447
0.09795617750.0703552121
0.11036391460.081257195
0.09820096990.0674029341
0.04347707540.0292828524
0.05852085920.0346208886
0.06189083940.0464959537
0.06359985670.0565072975
0.07725355820.0673848804
0.11386252250.0997522761
0.14525069640.1263889363
20102010
Economic flow (computed from national wealth estimates, mortality tables and observed age-wealth profiles)
Fiscal flow (computed from observed bequest and gift tax data, inc. tax exempt assets)
Source: T. Piketty, "On the long-run evolution of inheritance", QJE 2011
Figure 4: Annual inheritance flow as a fraction of national income, France 1820-2008
Figure5
0.21385479650.1984667005
0.21902122920.1909434759
0.22162187550.1941598542
0.21072568070.1680672585
0.21267617480.1807051931
0.23427814140.2081712009
0.25722936120.2449755938
0.251167510.2433668994
0.25482893960.2467057789
0.23958597940.2151239596
0.10229958380.0734747834
0.11827518970.0870819977
0.11495059750.0788995013
0.05693407650.0383464652
0.07936074760.0469497482
0.08590136940.064534043
0.09076668610.0806445235
0.10966702680.0956577232
0.16424549330.1438916109
0.20880510820.1816903889
20102010
Economic flow (computed from national wealth estimates, mortality tables and observed age-wealth profiles)
Fiscal flow (computed from observed bequest and gift tax data, inc. tax exempt assets)
Source: T. Piketty, "On the long-run evolution of inheritance", QJE 2011
Figure 5: Annual inheritance flow as a fraction of disposable income, France 1820-2008
DataFig1
Series used to construct figure 1: top inheritance tax rates 1900-2010
US : The top inheritance tax rate reported here includes only the federal estate tax (not the additional state-level estate and inheritance taxes). See Kopczuk and Saez (2004) for more details. Note that strictly speaking the new 35% top rate started to apply only to 2011 decedents onwards. For year 2010 decedents (repel year), there was actually no federal estate tax (but a 15% tax on capital gains did apply, though).
France: The top inheritance tax rate reported here is the top rate applying to the decedent's children. It also includes the "taxe successorale" applied in 1917-1934 (top rate with two children) and the maximum effective tax rate applied in 1927-1958. See Piketty (2001, Appendix J) for more details.
Germany: The top inheritance tax rate reported here is the top rate applying to the decedent's children. In 1946-1948 the top rate was set by the Allied Control Council. See Beckert (2008) and Dell (2008) for more details.
UK: See DataFig1(UK)
U.S.U.K.GermanyFrance
19000%8%0%2%
0%8%0%5%
0%8%0%5%
0%8%0%5%
0%8%0%5%
19050%8%0%5%
0%8%10%5%
0%15%10%5%
0%15%10%5%
0%15%10%5%
19100%15%10%7%
0%15%10%7%
0%15%10%7%
0%15%10%7%
0%20%10%7%
19150%20%10%7%
10%20%10%7%
17%20%10%18%
25%20%10%18%
25%40%35%18%
192025%40%35%29%
25%40%35%29%
25%40%15%29%
25%40%15%29%
34%40%15%29%
192540%40%15%29%
23%40%15%29%
20%40%15%25%
20%40%15%25%
20%40%15%25%
193020%50%15%25%
20%50%15%25%
35%50%15%25%
45%50%15%25%
55%50%15%25%
193563%50%15%25%
70%50%15%25%
70%50%15%25%
70%50%15%25%
70%55%15%25%
194074%65%15%25%
77%65%15%25%
77%65%15%25%
77%65%15%25%
77%65%15%25%
194577%65%15%25%
77%75%60%25%
77%75%60%25%
77%75%60%25%
77%80%38%25%
195077%80%38%25%
77%80%38%25%
77%80%38%25%
77%80%38%25%
77%80%15%25%
195577%80%15%25%
77%80%15%25%
77%80%15%25%
77%80%15%25%
77%80%15%15%
196077%80%15%15%
77%80%15%15%
77%80%15%15%
77%80%15%15%
77%80%15%15%
196577%80%15%15%
77%80%15%15%
77%80%15%15%
77%80%15%15%
77%85%15%20%
197077%85%15%20%
77%85%15%20%
77%75%15%20%
77%75%15%20%
77%75%35%20%
197577%75%35%20%
77%75%35%20%
70%75%35%20%
70%75%35%20%
70%75%35%20%
198070%75%35%20%
70%75%35%20%
65%75%35%20%
60%75%35%20%
55%60%35%40%
198555%60%35%40%
55%60%35%40%
55%60%35%40%
55%40%35%40%
55%40%35%40%
199055%40%35%40%
55%40%35%40%
55%40%35%40%
55%40%35%40%
55%40%35%40%
199555%40%35%40%
55%40%30%40%
55%40%30%40%
55%40%30%40%
55%40%30%40%
200055%40%30%40%
55%40%30%40%
50%40%30%40%
49%40%30%40%
48%40%30%40%
200547%40%30%40%
46%40%30%40%
45%40%30%40%
45%40%30%40%
45%40%30%40%
201035%40%30%40%
35%40%30%45%
DataFig1(UK)
Detailed series on UK top inheritance tax rates (data provided by A.B. Atkinson, september 2011)
Estate Duty was introduced in 1894
Estate duty was replaced in 1975 by Capital Transfer Tax, renamed in 1986 Inheritance Tax
The main sources are the Annual Reports (AR) of the Inland Revenue and Inland Revenue Statistics (IRS)
Notes
ameans tax not in operation
bData relate to tax years
cWhere change made other than at start of tax year (6 April), allocate to that year if before 6 October.
dInland Revenue is now known as HMRC.
Maximum rate of ED/CTT/IHTMaximum rate of estate dutyCapital Transfer TaxRate of Inheritance TaxSourceNotes
18948.08.0AR year ended 31 March 1936, Table 8
18958.08.0"
18968.08.0"
18978.08.0"
18988.08.0"
18998.08.0"
19008.08.0"
19018.08.0"
19028.08.0"
19038.08.0"
19048.08.0"
19058.08.0"
19068.08.0"
190715.015.0"
190815.015.0"
190915.015.0"
191015.015.0"
191115.015.0"
191215.015.0"
191315.015.0"
191420.020.0AR year ended 31 March 1949, Table 105
191520.020.0"
191620.020.0"
191720.020.0"
191820.020.0"
191940.040.0"
192040.040.0"
192140.040.0"
192240.040.0"
192340.040.0"
192440.040.0"
192540.040.0"
192640.040.0"
192740.040.0"
192840.040.0"
192940.040.0"
193050.050.0"
193150.050.0"
193250.050.0"
193350.050.0"
193450.050.0"
193550.050.0"
193650.050.0"
193750.050.0"
193850.050.0"
193955.055.0"
194065.065.0AR year ended 31 March 1951, Table 135
194165.065.0"
194265.065.0"
194365.065.0"
194465.065.0"
194565.065.0"
194675.075.0AR year ended 31 March 1969, Table 35
194775.075.0"
194875.075.0"
194980.080.0"
195080.080.0"
195180.080.0"
195280.080.0"
195380.080.0"
195480.080.0"
195580.080.0"
195680.080.0"
195780.080.0"
195880.080.0"
195980.080.0"
196080.080.0"
196180.080.0"
196280.080.0"
196380.080.0"
196480.080.0"
196580.080.0"
196680.080.0"
196780.080.0"
196880.080.0"
196985.085.0"Tax limited to 80 per cent of estate
197085.085.0AR year ended 31 March 1975, Table 23Tax limited to 80 per cent of estate
197185.085.0"Tax limited to 80 per cent of estate
197275.075.0"
197375.075.0"
197475.075.0"
197575.075.0HMRC website, Table A.8
197675.075.0"
197775.075.0"
197875.075.0"
197975.075.0"
198075.075.0"
198175.075.0"
198275.075.0"
198375.075.0"
198460.060.0"
198560.060.0"
198660.060.0IRS 2000, Table A.8
198760.060.0"
198840.040.0"
198940.040.0"
199040.040.0"
199140.040.0"
199240.040.0"
199340.040.0"
199440.040.0"
199540.040.0"
199640.040.0"
199740.040.0"
199840.040.0"
199940.040.0"
200040.040.0"
200140.040.0HMRC website, Table A.8
200240.040.0"
200340.040.0"
200440.040.0"
200540.040.0"
200640.040.0"
200740.040.0"
200840.040.0"
200940.040.0"
201040.040.0"
201140.040.0"
DataFig2
Series used to construct figure 2: top income tax rates 1900-2010
US: The top marginal income tax rate reported here includes general income tax supplements (i.e. surtaxes applying to all incomes above a certain level), but excludes all other taxes and social contributions (the uncapped rate of social security contributions on top earnings has been 2.5% since 1994 and was 0% before). Between 1971 and 1981, the top rate applying to earned income was lower than the top rate applying to ordinary unearned income (e.g. capital income). Also, between 1944 and 1963, there was a maximum top effective rate. Here we do not mention the reduced rates applying to capital gains. See Saez, Slemro and Gierz (2011, Table A1) for more details. See also Tax Policy Center website.
France: The top marginal income tax rate reported here includes general income tax supplements (i.e. surtaxes applying to all incomes above a certain level), but excludes all other taxes (e.g. corporate taxes) and social contributions (in particular, excluding the CSG, currently 8%). Between 1919 and 1958, top rates were higher for single taxpayers (e.g. during the interwar period, singles paid a 25% tax surcharge, so that the top rate was 62.5% rather than 50% in 1919-1922, 75% rather than 60% in 1923, etc.); there were also smaller tax surcharges for married taxpayers with no children after three years of marriage. All these tax surcharges were excluded here, because they apply only to a minority of top income taxpayers. For complete details about the history of income tax law in France, see Piketty 2001, Chapters 3-4.
Germany: The top marginal income tax rate reported here includes general income tax supplements (i.e. surtaxes applying to all incomes above a certain level), but excludes all other taxes and social contributions. In 1946-1948 the top rate was set by the Allied Control Council. See Dell (2008) for more details.
UK: See DataFig2(UK)
Top marginal income tax rate
U.S.U.K.GermanyFranceU.S. (top marginal rate on earned income)U.S. (top effective rate)U.K. (top marginal rate on earned income)
19000%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
19050%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%0%3%0%0%0%0%
0%8%3%0%0%0%8%
19100%8%3%0%0%0%8%
0%8%3%0%0%0%8%
0%8%3%0%0%0%8%
7%8%3%0%7%7%8%
7%17%4%0%7%7%17%
19157%33%4%2%7%7%33%
15%43%4%10%15%15%43%
67%43%4%20%67%67%43%
77%53%20%20%77%77%53%
73%53%30%50%73%73%53%
192073%60%40%50%73%73%60%
73%60%40%50%73%73%60%
58%55%40%50%58%58%55%
44%53%40%60%44%44%53%
46%53%40%72%46%46%53%
192525%50%40%60%25%25%50%
25%50%40%30%25%25%50%
25%50%40%30%25%25%50%
25%50%40%33%25%25%50%
24%58%40%33%24%24%58%
193025%64%40%33%25%25%64%
25%66%40%33%25%25%66%
63%66%40%37%63%63%66%
63%66%40%37%63%63%66%
63%64%50%30%63%63%64%
193563%64%50%36%63%63%64%
79%65%50%48%79%79%65%
79%66%50%52%79%79%66%
79%75%50%53%79%79%75%
79%83%60%53%79%79%83%
194081%90%60%53%81%81%90%
81%98%60%60%81%81%98%
88%98%60%70%88%88%98%
88%98%60%70%88%88%98%
94%98%60%70%94%90%98%
194594%98%60%60%94%90%98%
86%98%90%60%86%86%98%
86%98%90%72%86%86%98%
82%98%90%60%82%77%98%
82%98%75%60%82%77%98%
195084%98%75%60%84%87%98%
91%98%75%60%91%87%98%
92%98%75%60%92%88%98%
92%95%66%60%92%88%95%
91%95%60%60%91%87%95%
195591%93%53%66%91%87%93%
91%93%53%66%91%87%93%
91%93%53%66%91%87%93%
91%93%53%66%91%87%93%
91%89%53%66%91%87%89%
196091%89%53%66%91%87%89%
91%89%53%63%91%87%89%
91%89%53%63%91%87%89%
91%89%53%65%91%87%89%
77%89%53%63%77%77%89%
196570%91%53%63%70%70%91%
70%91%53%65%70%70%91%
70%91%53%66%70%70%91%
75%91%53%66%75%75%91%
77%91%53%65%77%77%91%
197072%91%53%62%72%72%91%
70%89%53%61%60%70%83%
70%89%53%60%50%70%83%
70%90%53%60%50%70%75%
70%98%53%60%50%70%83%
197570%98%56%60%50%70%83%
70%98%56%60%50%70%83%
70%98%56%60%50%70%83%
70%98%56%60%50%70%83%
70%75%56%60%50%70%60%
198070%75%56%66%50%70%60%
69%75%56%66%50%69%60%
50%75%56%70%50%50%60%
50%75%56%70%50%50%60%
50%60%56%67%50%50%60%
198550%60%56%65%50%50%60%
50%60%56%58%50%50%60%
39%60%56%57%39%39%60%
28%40%56%57%28%28%40%
28%40%56%57%28%28%40%
199028%40%53%57%28%28%40%
31%40%53%57%31%31%40%
31%40%53%57%31%31%40%
40%40%53%57%40%40%40%
40%40%53%57%40%40%40%
199540%40%53%57%40%40%40%
40%40%53%54%40%40%40%
40%40%53%54%40%40%40%
40%40%53%54%40%40%40%
40%40%53%54%40%40%40%
200040%40%51%53%40%40%40%
39%40%49%53%39%39%40%
39%40%49%50%39%39%40%
35%40%49%48%35%35%40%
35%40%45%48%35%35%40%
200535%40%42%48%35%35%40%
35%40%42%40%35%35%40%
35%40%45%40%35%35%40%
35%40%45%40%35%35%40%
35%40%45%40%35%35%40%
201035%50%45%41%35%35%50%
35%50%45%41%35%35%50%
DataFig2(UK)
Detailed series on UK top income tax rates (data provided by A.B. Atkinson, september 2011)
Super-tax was introduced in 1908 and was renamed surtax with effect from 1928-9.
The income tax does not include National Insurance contributions.
No account is taken of the Special Contribution levied on investment income in 1949.
No account is taken of the Special Charge on investment income in 1968.
The investment income surcharge was abolished in 1984.
For 1971/2 and 1972/3 earned income relief (EIR) applied to all earnings; in all other years, there was a maximum.
EIR is therefore only taken into account for these years, reducing taxable earned income by 15 per cent.
Source HMRC website, table TA.1.
Tax rates refer to the year of assessment; the income subject to the tax may have arisen in a previous year.
ReferenceSabine, B E V, 1966, A history of income tax, Allen and Unwin, London.
Highest rate of tax on earned incomeHighest rate of tax on capital incomeHighest rate of income taxSourceHighest rate of surtaxSourceInvestment income surchargeSourceNotes
19098.338.335.83Sabine, pages 146-72.5AR year ended 31 March 1922, Table 738.38.3
19108.338.335.83"2.5"8.38.3
19118.338.335.83AR year ended 31 March 1922, Table 542.5"8.38.3
19128.338.335.83"2.5"8.38.3
19138.338.335.83"2.5"14.714.7
191417.2217.228.33"8.9"25.825.8
191532.5032.5015.00"17.5"32.532.5
191642.5042.5025.00"17.5"42.542.5
191742.5042.5025.00"17.5"47.547.5
191852.5052.5030.00"22.5AR year ended 31 March 1928, Table 6052.552.5
191952.5052.5030.00"22.5"60.060.0
192060.0060.0030.00AR year ended 31 March 1928, Table 4330.0"60.060.0
192160.0060.0030.00"30.0"60.060.0
192255.0055.0025.00"30.0"55.055.0
192352.5052.5022.50"30.0"52.552.5
192452.5052.5022.50"30.0"52.552.5
192550.0050.0020.00"30.0"50.050.0
192650.0050.0020.0AR year ended 31 March 1936, Table 3730.0AR year ended 31 March 1936, Table 5350.050.0
192750.0050.0020.0"30.0"50.050.0
192850.0050.0020.0"30.0"50.050.0
192957.5057.5020.0"37.5"57.557.5
193063.7563.7522.5"41.3"63.863.8
193166.2566.2525.0"41.3"66.366.3
193266.2566.2525.0"41.3"66.366.3
193366.2566.2525.0"41.3"66.366.3
193463.7563.7522.5"41.3"63.863.8
193563.7563.7522.5"41.3AR year ended 31 March 1939, Table 5463.863.8
193665.0065.0023.8AR year ended 31 March 1939, Table 3841.3"65.065.0
193766.2566.2525.0"41.3AR year ended 31 March 1949, Table 9266.366.3
193875.0075.0027.5"47.5"75.075.0
193982.5082.5035.0AR year ended 31 March 1949, Table 1947.5"82.582.5
194090.0090.0042.5"47.5AR year ended 31 March 1951, Table 11990.090.0
194197.5097.5050.0AR year ended 31 March 1951, Table 1847.5"97.597.5
194297.5097.5050.0"47.5"97.597.5
194397.5097.5050.0"47.5"97.597.5
194497.5097.5050.0"47.5"97.597.5
194597.5097.5050.0"47.5"97.597.5
194697.5097.5045.0"52.5"97.597.5
194797.5097.5045.0"52.5"97.597.5
194897.5097.5045.0"52.5"97.597.5
194997.5097.5045.0"52.5"97.597.5
195097.5097.5045.0"52.5AR year ended 31 March 1963, Table 79A97.597.5
195197.5097.5047.5AR year ended 31 March 1954, Table 1750.0"97.597.5
195297.5097.5047.5AR year ended 31 March 1963, Table 2450.0"97.597.5
195395.0095.0045.0"50.0"95.095.0
195495.0095.0045.0"50.0"95.095.0
195592.5092.5042.5"50.0"92.592.5
195692.5092.5042.5"50.0"92.592.5
195792.5092.5042.5"50.0"92.592.5
195892.5092.5042.5"50.0"92.592.5
195988.7588.7538.75AR year ended 31 March 1969, Table 3050.0AR year ended 31 March 1969, Table 3388.888.8
196088.7588.7538.75"50.0"88.888.8
196188.7588.7538.75"50.0"88.888.8
196288.7588.7538.75"50.0"88.888.8
196388.7588.7538.75"50.0"88.888.8
196488.7588.7538.75"50.0"88.888.8
196591.2591.2541.25"50.0"A surcharge of 10 per cent was charged on surtax liabilities for 1965-696.396.3
196691.2591.2541.25"50.0"91.391.3
196791.2591.2541.25"50.0"91.391.3
196891.2591.2541.25"50.0"91.391.3
196991.2591.2541.25"50.0AR year ended 31 March 1975, Table 2391.391.3
197091.2591.2541.25AR year ended 31 March 1975, Table 2250.0"91.391.3
197182.9488.7538.75"50.0"73.888.8
197282.9488.7538.75"50.0"A surcharge of 10 per cent was charged on surtax liabilities for 1972-7373.888.8
197375.0090.0075.00AR year ended 31 March 1975, Table 2315.0AR year ended 31 March 1975, Table 2375.090.0
197483.0098.0083.00"15.0"83.098.0
197583.0098.0083.00"15.0"83.098.0
197683.0098.0083.00IRS 1979, Appendix A.215.0IRS 1979, Appendix A.283.098.0
197783.0098.0083.00"15.0"83.098.0
197883.0098.0083.00"15.0"83.098.0
197960.0075.0060.00AR year ended 31 March 1980, page 215.0AR year ended 31 March 1980, page 260.075.0
198060.0075.0060.00"15.0"60.075.0
198160.0075.0060.00IRS 1984, Table A.215.0IRS 1984, Table A.260.075.0
198260.0075.0060.00"15.0"60.075.0
198360.0075.0060.00"15.0"60.075.0
198460.0060.0060.00IRS 2000, Table A.260.060.0
198560.0060.0060.00"60.060.0
198660.0060.0060.00"60.060.0
198760.0060.0060.00"60.060.0
198840.0040.0040.00"40.040.0
198940.0040.0040.00"40.040.0
199040.0040.0040.00"40.040.0
199140.0040.0040.00"40.040.0
199240.0040.0040.00"40.040.0
199340.0040.0040.00"40.040.0
199440.0040.0040.00"40.040.0
199540.0040.0040.00"40.040.0
199640.0040.0040.00"40.040.0
199740.0040.0040.00"40.040.0
199840.0040.0040.00"40.040.0
199940.0040.0040.00"40.040.0
200040.0040.0040.00"40.040.0
200140.0040.0040.00HMRC website, Table A.240.040.0
200240.0040.0040.00"40.040.0
200340.0040.0040.00"40.040.0
200440.0040.0040.00"
200540.0040.0040.00"
200640.0040.0040.00"
200740.0040.0040.00"
200840.0040.0040.00"
200940.0040.0040.00"HMRC website
201050.0050.0050.00""
201150.0050.0050.00""
DataFig3
Series used to construct figures 3a-3b: inheritance flows in France 1820-2008 (see Piketty, On the long run evolution of inheritance, 2010 working paper version, data appendix)
Bt/YtBtf/YtBt/YdtBtf/Ydt
Piketty 2010, Table A4Piketty 2010, Table B2Piketty 2010, Table B2Piketty 2010, Table B2
182020.3%18.9%21.4%19.8%
183020.8%18.1%21.9%19.1%
184021.1%18.4%22.2%19.4%
185020.0%16.0%21.1%16.8%
186020.2%17.2%21.3%18.1%
187022.3%19.8%23.4%20.8%
188024.4%23.3%25.7%24.5%
189023.9%23.1%25.1%24.3%
190024.1%23.3%25.5%24.7%
191022.7%20.3%24.0%21.5%
19209.8%7.0%10.2%7.3%
193011.0%8.1%11.8%8.7%
19409.8%6.7%11.5%7.9%
19504.3%2.9%5.7%3.8%
19605.9%3.5%7.9%4.7%
19706.2%4.6%8.6%6.5%
19806.4%5.7%9.1%8.1%
19907.7%6.7%11.0%9.6%
200011.4%10.0%16.4%14.4%
200814.5%12.6%20.9%18.2%
2010
Figure1(nn)
00.080.020
00.080.050
00.080.050
00.080.050
00.080.050
00.080.050
00.080.050.1
00.150.050.1
00.150.050.1
00.150.050.1
00.150.0650.1
00.150.0650.1
00.150.0650.1
00.150.0650.1
00.20.0650.1
00.20.0650.1
0.10.20.0650.1
0.166670.20.180.1
0.250.20.180.1
0.250.40.180.35
0.250.40.290.35
0.250.40.290.35
0.250.40.290.15
0.250.40.290.15
0.33750.40.290.15
0.40.40.290.15
0.23330.40.290.15
0.20.40.250.15
0.20.40.250.15
0.20.40.250.15
0.20.50.250.15
0.20.50.250.15
0.345830.50.250.15
0.450.50.250.15
0.545830.50.250.15
0.633330.50.250.15
0.70.50.250.15
0.70.50.250.15
0.70.50.250.15
0.70.550.250.15
0.7350.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.750.250.6
0.770.750.250.6
0.770.750.250.6
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.850.20.15
0.770.850.20.15
0.770.850.20.15
0.770.750.20.15
0.770.750.20.15
0.770.750.20.35
0.770.750.20.35
0.770.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.650.750.20.35
0.60.750.20.35
0.550.60.40.35
0.550.60.40.35
0.550.60.40.35
0.550.60.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.50.40.40.3
0.490.40.40.3
0.480.40.40.3
0.470.40.40.3
0.460.40.40.3
0.450.40.40.3
0.450.40.40.3
0.450.40.40.3
0.350.40.40.3
0.350.40.450.3
U.S.
U.K.
France
Germany
Top Inheritance Tax Rates 1900-2011
Figure2(nn)
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
00.083333333300.03
00.083333333300.03
00.083333333300.03
00.083333333300.03
0.070.083333333300.03
0.070.172222208300.04
0.070.3250.020.04
0.150.4250.10.04
0.670.4250.20.04
0.770.5250.20.2
0.730.5250.50.3
0.730.60.50.4
0.730.60.50.4
0.580.550.50.4
0.4350.5250.60.4
0.460.5250.720.4
0.250.50.60.4
0.250.50.30.4
0.250.50.30.4
0.250.50.33330.4
0.240.5750.33330.4
0.250.63750.33330.4
0.250.66250.33330.4
0.630.66250.36670.4
0.630.66250.36670.4
0.630.63750.30.5
0.630.63750.360.5
0.790.650.480.5
0.790.66250.51840.5
0.790.750.533320.5
0.790.8250.533320.6
0.8110.90.533320.6
0.810.9750.60.6
0.880.9750.70.6
0.880.9750.70.6
0.940.9750.70.6
0.940.9750.60.6
0.86450.9750.60.9
0.86450.9750.720.9
0.82130.9750.60.9
0.82130.9750.60.75
0.84360.9750.60.75
0.910.9750.60.75
0.920.9750.60.75
0.920.950.60.66
0.910.950.60.6
0.910.9250.660.53
0.910.9250.660.53
0.910.9250.660.53
0.910.9250.660.53
0.910.88750.660.53
0.910.88750.660.53
0.910.88750.630.53
0.910.88750.630.53
0.910.88750.645750.53
0.770.88750.630.53
0.70.91250.630.53
0.70.91250.650.53
0.70.91250.660.53
0.75250.91250.660.53
0.770.91250.6450.53
0.71750.91250.6180.53
0.70.88750.6120.53
0.70.88750.60.53
0.70.90.60.53
0.70.980.60.53
0.70.980.60.56
0.70.980.60.56
0.70.980.60.56
0.70.980.60.56
0.70.750.60.56
0.70.750.660.56
0.69130.750.660.56
0.50.750.69550.56
0.50.750.7020.56
0.50.60.66950.56
0.50.60.650.56
0.50.60.580.56
0.3850.60.5680.56
0.280.40.5680.56
0.280.40.5680.56
0.280.40.5680.53
0.310.40.5680.53
0.310.40.5680.53
0.3960.40.5680.53
0.3960.40.5680.53
0.3960.40.5680.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.53250.51
0.3860.40.52750.485
0.3860.40.49580.485
0.350.40.48090.485
0.350.40.48090.45
0.350.40.48090.42
0.350.40.40.42
0.350.40.40.45
0.350.40.40.45
0.350.40.40.45
0.350.50.410.45
0.350.50.410.45
U.S.
U.K.
France
Germany
Top Income Tax Rates 1900-2011
Figure3(nn)
0000
0000
0000
0000
0000
0000
0000
0000
0000
000.08333333330.0833333333
000.08333333330.0833333333
000.08333333330.0833333333
000.08333333330.0833333333
0.070.070.08333333330.0833333333
0.070.070.17222220830.1722222083
0.070.070.3250.325
0.150.150.4250.425
0.670.670.4250.425
0.770.770.5250.525
0.730.730.5250.525
0.730.730.60.6
0.730.730.60.6
0.580.580.550.55
0.4350.4350.5250.525
0.460.460.5250.525
0.250.250.50.5
0.250.250.50.5
0.250.250.50.5
0.250.250.50.5
0.240.240.5750.575
0.250.250.63750.6375
0.250.250.66250.6625
0.630.630.66250.6625
0.630.630.66250.6625
0.630.630.63750.6375
0.630.630.63750.6375
0.790.790.650.65
0.790.790.66250.6625
0.790.790.750.75
0.790.790.8250.825
0.8110.8110.90.9
0.810.810.9750.975
0.880.880.9750.975
0.880.880.9750.975
0.940.940.9750.975
0.940.940.9750.975
0.86450.86450.9750.975
0.86450.86450.9750.975
0.82130.82130.9750.975
0.82130.82130.9750.975
0.84360.84360.9750.975
0.910.910.9750.975
0.920.920.9750.975
0.920.920.950.95
0.910.910.950.95
0.910.910.9250.925
0.910.910.9250.925
0.910.910.9250.925
0.910.910.9250.925
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.770.770.88750.8875
0.70.70.91250.9125
0.70.70.91250.9125
0.70.70.91250.9125
0.75250.75250.91250.9125
0.770.770.91250.9125
0.71750.71750.91250.9125
0.60.70.8293750.8875
0.50.70.8293750.8875
0.50.70.750.9
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.60.75
0.50.70.60.75
0.50.69130.60.75
0.50.50.60.75
0.50.50.60.75
0.50.50.60.6
0.50.50.60.6
0.50.50.60.6
0.3850.3850.60.6
0.280.280.40.4
0.280.280.40.4
0.280.280.40.4
0.310.310.40.4
0.310.310.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3860.3860.40.4
0.3860.3860.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.50.5
0.350.350.50.5
U.S. (earned income)
U.S. (unearned income)
U.K. (earned income)
U.K. (unearned income)
Top Income Tax Rates: Earned (Labor) vs Unearned (Capital)
Figure4(nn)
0.20316205670.1885433655
0.20807016770.1813963021
0.21054078170.1844518615
0.20018939660.1596638956
0.20204236610.1716699334
0.22256423440.1977626408
0.24436789310.2327268141
0.23860913450.2311985544
0.24104896190.2333650644
0.2266302710.2034910447
0.09795617750.0703552121
0.11036391460.081257195
0.09820096990.0674029341
0.04347707540.0292828524
0.05852085920.0346208886
0.06189083940.0464959537
0.06359985670.0565072975
0.07725355820.0673848804
0.11386252250.0997522761
0.14525069640.1263889363
20102010
Economic flow (computed from national wealth estimates, mortality tables and observed age-wealth profiles)
Fiscal flow (computed from observed bequest and gift tax data, inc. tax exempt assets)
Source: T. Piketty, "On the long-run evolution of inheritance", QJE 2011
Annual inheritance flow as a fraction of national income, France 1820-2008
Figure5(nn)
0.21385479650.1984667005
0.21902122920.1909434759
0.22162187550.1941598542
0.21072568070.1680672585
0.21267617480.1807051931
0.23427814140.2081712009
0.25722936120.2449755938
0.251167510.2433668994
0.25482893960.2467057789
0.23958597940.2151239596
0.10229958380.0734747834
0.11827518970.0870819977
0.11495059750.0788995013
0.05693407650.0383464652
0.07936074760.0469497482
0.08590136940.064534043
0.09076668610.0806445235
0.10966702680.0956577232
0.16424549330.1438916109
0.20880510820.1816903889
20102010
Economic flow (computed from national wealth estimates, mortality tables and observed age-wealth profiles)
Fiscal flow (computed from observed bequest and gift tax data, inc. tax exempt assets)
Source: T. Piketty, "On the long-run evolution of inheritance", QJE 2011
Annual inheritance flow as a fraction of disposable income, France 1820-2008
-
Result 1: Optimal Inheritance Tax FormulaSimple formula for optimal bequest tax rate expressed in terms of estimable parameters:
with: by = bequest flow, eB = elasticity, sb0 = bequest taste B increases with by and decreases with eB and sb0
For realistic parameters: B=50-60% (or more..or less...) our theory can account for the variety of observed top bequest tax rates (30%-80%) hopefully our approach can contribute to a tax debate based more upon empirical estimates of key distributional & behavioral parameters (and less about abstract theory)
-
Figure1
00.080.020
00.080.050
00.080.050
00.080.050
00.080.050
00.080.050
00.080.050.1
00.150.050.1
00.150.050.1
00.150.050.1
00.150.0650.1
00.150.0650.1
00.150.0650.1
00.150.0650.1
00.20.0650.1
00.20.0650.1
0.10.20.0650.1
0.166670.20.180.1
0.250.20.180.1
0.250.40.180.35
0.250.40.290.35
0.250.40.290.35
0.250.40.290.15
0.250.40.290.15
0.33750.40.290.15
0.40.40.290.15
0.23330.40.290.15
0.20.40.250.15
0.20.40.250.15
0.20.40.250.15
0.20.50.250.15
0.20.50.250.15
0.345830.50.250.15
0.450.50.250.15
0.545830.50.250.15
0.633330.50.250.15
0.70.50.250.15
0.70.50.250.15
0.70.50.250.15
0.70.550.250.15
0.7350.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.650.250.15
0.770.750.250.6
0.770.750.250.6
0.770.750.250.6
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.38
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.250.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.80.150.15
0.770.850.20.15
0.770.850.20.15
0.770.850.20.15
0.770.750.20.15
0.770.750.20.15
0.770.750.20.35
0.770.750.20.35
0.770.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.70.750.20.35
0.650.750.20.35
0.60.750.20.35
0.550.60.40.35
0.550.60.40.35
0.550.60.40.35
0.550.60.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.35
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.550.40.40.3
0.50.40.40.3
0.490.40.40.3
0.480.40.40.3
0.470.40.40.3
0.460.40.40.3
0.450.40.40.3
0.450.40.40.3
0.450.40.40.3
0.350.40.40.3
0.350.40.450.3
U.S.
U.K.
France
Germany
Figure 1: Top Inheritance Tax Rates 1900-2011
Figure2
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
0000.03
00.083333333300.03
00.083333333300.03
00.083333333300.03
00.083333333300.03
0.070.083333333300.03
0.070.172222208300.04
0.070.3250.020.04
0.150.4250.10.04
0.670.4250.20.04
0.770.5250.20.2
0.730.5250.50.3
0.730.60.50.4
0.730.60.50.4
0.580.550.50.4
0.4350.5250.60.4
0.460.5250.720.4
0.250.50.60.4
0.250.50.30.4
0.250.50.30.4
0.250.50.33330.4
0.240.5750.33330.4
0.250.63750.33330.4
0.250.66250.33330.4
0.630.66250.36670.4
0.630.66250.36670.4
0.630.63750.30.5
0.630.63750.360.5
0.790.650.480.5
0.790.66250.51840.5
0.790.750.533320.5
0.790.8250.533320.6
0.8110.90.533320.6
0.810.9750.60.6
0.880.9750.70.6
0.880.9750.70.6
0.940.9750.70.6
0.940.9750.60.6
0.86450.9750.60.9
0.86450.9750.720.9
0.82130.9750.60.9
0.82130.9750.60.75
0.84360.9750.60.75
0.910.9750.60.75
0.920.9750.60.75
0.920.950.60.66
0.910.950.60.6
0.910.9250.660.53
0.910.9250.660.53
0.910.9250.660.53
0.910.9250.660.53
0.910.88750.660.53
0.910.88750.660.53
0.910.88750.630.53
0.910.88750.630.53
0.910.88750.645750.53
0.770.88750.630.53
0.70.91250.630.53
0.70.91250.650.53
0.70.91250.660.53
0.75250.91250.660.53
0.770.91250.6450.53
0.71750.91250.6180.53
0.70.88750.6120.53
0.70.88750.60.53
0.70.90.60.53
0.70.980.60.53
0.70.980.60.56
0.70.980.60.56
0.70.980.60.56
0.70.980.60.56
0.70.750.60.56
0.70.750.660.56
0.69130.750.660.56
0.50.750.69550.56
0.50.750.7020.56
0.50.60.66950.56
0.50.60.650.56
0.50.60.580.56
0.3850.60.5680.56
0.280.40.5680.56
0.280.40.5680.56
0.280.40.5680.53
0.310.40.5680.53
0.310.40.5680.53
0.3960.40.5680.53
0.3960.40.5680.53
0.3960.40.5680.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.540.53
0.3960.40.53250.51
0.3860.40.52750.485
0.3860.40.49580.485
0.350.40.48090.485
0.350.40.48090.45
0.350.40.48090.42
0.350.40.40.42
0.350.40.40.45
0.350.40.40.45
0.350.40.40.45
0.350.50.410.45
0.350.50.410.45
U.S.
U.K.
France
Germany
Figure 2: Top Income Tax Rates 1900-2011
Figure3
0000
0000
0000
0000
0000
0000
0000
0000
0000
000.08333333330.0833333333
000.08333333330.0833333333
000.08333333330.0833333333
000.08333333330.0833333333
0.070.070.08333333330.0833333333
0.070.070.17222220830.1722222083
0.070.070.3250.325
0.150.150.4250.425
0.670.670.4250.425
0.770.770.5250.525
0.730.730.5250.525
0.730.730.60.6
0.730.730.60.6
0.580.580.550.55
0.4350.4350.5250.525
0.460.460.5250.525
0.250.250.50.5
0.250.250.50.5
0.250.250.50.5
0.250.250.50.5
0.240.240.5750.575
0.250.250.63750.6375
0.250.250.66250.6625
0.630.630.66250.6625
0.630.630.66250.6625
0.630.630.63750.6375
0.630.630.63750.6375
0.790.790.650.65
0.790.790.66250.6625
0.790.790.750.75
0.790.790.8250.825
0.8110.8110.90.9
0.810.810.9750.975
0.880.880.9750.975
0.880.880.9750.975
0.940.940.9750.975
0.940.940.9750.975
0.86450.86450.9750.975
0.86450.86450.9750.975
0.82130.82130.9750.975
0.82130.82130.9750.975
0.84360.84360.9750.975
0.910.910.9750.975
0.920.920.9750.975
0.920.920.950.95
0.910.910.950.95
0.910.910.9250.925
0.910.910.9250.925
0.910.910.9250.925
0.910.910.9250.925
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.910.910.88750.8875
0.770.770.88750.8875
0.70.70.91250.9125
0.70.70.91250.9125
0.70.70.91250.9125
0.75250.75250.91250.9125
0.770.770.91250.9125
0.71750.71750.91250.9125
0.60.70.8293750.8875
0.50.70.8293750.8875
0.50.70.750.9
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.830.98
0.50.70.60.75
0.50.70.60.75
0.50.69130.60.75
0.50.50.60.75
0.50.50.60.75
0.50.50.60.6
0.50.50.60.6
0.50.50.60.6
0.3850.3850.60.6
0.280.280.40.4
0.280.280.40.4
0.280.280.40.4
0.310.310.40.4
0.310.310.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3960.3960.40.4
0.3860.3860.40.4
0.3860.3860.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.40.4
0.350.350.50.5
0.350.350.50.5
U.S. (earned income)
U.S. (unearned income)
U.K. (earned income)
U.K. (unearned income)
Figure 3: Top Income Tax Rates: Earned (Labor) vs Unearned (Capital)
Figure4
0.20316205670.1885433655
0.20807016770.1813963021
0.21054078170.1844518615
0.20018939660.1596638956
0.20204236610.1716699334
0.22256423440.1977626408
0.24436789310.2327268141
0.23860913450.2311985544
0.24104896190.2333650644
0.2266302710.2034910447
0.09795617750.0703552121
0.11036391460.081257195
0.09820096990.0674029341
0.04347707540.0292828524
0.05852085920.0346208886
0.06189083940.0464959537
0.06359985670.0565072975
0.07725355820.0673848804
0.11386252250.0997522761
0.14525069640.1263889363
20102010
Economic flow (computed from national wealth estimates, mortality tables and observed age-wealth profiles)
Fiscal flow (computed from observed bequest and gift tax data, inc. tax exempt assets)
Source: T. Piketty, "On the long-run evolution of inheritance", QJE 2011
Figure 4: Annual inheritance flow as a fraction of national income, France 1820-2008
Figure5
0.21385479650.1984667005
0.21902122920.1909434759
0.22162187550.1941598542
0.21072568070.1680672585
0.21267617480.1807051931
0.23427814140.2081712009
0.25722936120.2449755938
0.251167510.2433668994
0.25482893960.2467057789
0.23958597940.2151239596
0.10229958380.0734747834
0.11827518970.0870819977
0.11495059750.0788995013
0.05693407650.0383464652
0.07936074760.0469497482
0.08590136940.064534043
0.09076668610.0806445235
0.10966702680.0956577232
0.16424549330.1438916109
0.20880510820.1816903889
20102010
Economic flow (computed from national we
