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on Public Economics |
| By: | Jasper Boll; Emmanuel Saez; Gabriel Zucman |
| Abstract: | This paper documents the wealth of California’s billionaires and the taxes they pay. California billionaires’ wealth exceeds $2 trillion today, the equivalent of 50% of California’s GDP. It has grown 144% from 2023 to 2025, fueled by the AI boom. Over the longer run, the real wealth of California’s billionaire class—the 0.0002% richest households—has been multiplied by 30 from 1982 to 2025, while average real family income in California has about doubled. California billionaires pay about 0.2% of their wealth in California income tax ($3.2 billion/year), representing 2.4% of total California income tax revenue on average over 2023-2025. Using Securities and Exchange Commission data from Alphabet, Meta, Oracle, and Nvidia since 2004, we estimate the trajectory of wealth, income, and taxes paid by the top 4 California billionaires—Page, Brin, Zuckerberg, Ellison (through 2020), and Huang (since 2021)—focusing on their business wealth. This group alone holds nearly $1 trillion in business wealth, almost half of total California billionaire wealth. For this group, wealth growth (+322% over 2023-2025) and low taxation (0.04% of wealth in annual California income tax) are more pronounced. The proposed one-off California billionaire tax of 5%, payable over 5 years, is both small relative to California billionaires’ wealth gains and large relative to the taxes they currently pay. We estimate that it could raise about $100 billion, with comparatively minor impacts on income tax revenue. Using empirical estimates of mobility responses to wealth taxation, we find that an annual wealth tax on California billionaires could raise substantial additional revenue even after accounting for income tax losses due to mobility. |
| JEL: | H20 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35218 |
| By: | Andersson, Julius J.; Atkinson, Giles |
| Abstract: | We present a simple model showing how income inequality and the income elasticity of demand jointly shape the tax progressivity of indirect taxes, with rising inequality increasing the regressivity of taxes on necessities. We test the model’s predictions by analyzing the Swedish carbon tax on transport fuel. We find that the tax becomes increasingly regressive over time, closely tracking rising income inequality. We also show that the relative incidence shifts from regressive to progressive when using annual expenditure rather than annual income as the welfare measure, as expenditure is more evenly distributed. A cross-country analysis of gasoline taxes in high-income nations further supports our findings, establishing a strong correlation between higher inequality and greater regressivity. Our model helps policymakers identify when complementary redistributive measures such as lump-sum transfers may become necessary. |
| Keywords: | tax progressivity; income inequality; gasoline taxation; carbon taxation |
| JEL: | H23 H24 D31 D63 Q58 |
| Date: | 2026–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138449 |
| By: | James Giesecke; Jason Nassios |
| Abstract: | This paper compares three capital-gains tax designs for personally held CGT assets: (i) the current Australian nominal gains system; (ii) the proposed return to inflation indexation with asymmetric treatment of real gains and losses; and, (iii) a benchmark based on symmetric treatment of real gains and losses. The analysis centres the expected capital-price path on CPI inflation, thereby isolating the tax treatment of inflation-driven capital price changes. Three findings emerge. First, under the current nominal gains system, the long-run CGT liability on an asset that merely preserves its purchasing power approaches 23.5 per cent of the asset's terminal value at top marginal rates. Second, asset-by-asset indexation with asymmetric recognition of losses imposes a tax penalty on cross-sectional dispersion in individual asset returns that, at a 30-year horizon, exceeds the burden of the current system. Third, the effective CGT burden under both the current and proposed systems is shaped by the inflation environment, although through different channels: the current system taxes inflationary nominal gains, while the proposed system widens the band of unrecognised real losses as inflation raises the indexed cost base. A symmetric real-gains tax avoids these distortions. |
| Keywords: | Capital gains tax, Asymmetric loss recognition, Inflation indexation, Nominal versus real gains, Effective tax burden |
| JEL: | E62 H21 H24 G11 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cop:wpaper:g-370 |
| By: | Jun Takahashi; Yoshiyuki Nakazono; Kento Tango |
| Abstract: | Complex tax incentives, such as means-tested tax transfers, are known to distort labor supply decisions (Chetty and Saez, 2013). This study conducts a randomized experiment to examine whether providing information about income taxation induces individuals to change their labor supply. The results show that tax information provision increases stated annual earnings by an average of 0.9%, and raises the probability of planning to earn above the threshold by 4.3%. However, this increase in stated intentions does not translate into actual labor supply, as revealed by the end-of-year follow-up survey. The findings suggest that while information can correct misconceptions and shift intentions, entrenched behavioral norms tied to institutional thresholds, together with psychological frictions, may limit the effectiveness of such interventions in changing actual behavior. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:toh:tupdaa:86 |
| By: | C. Palomino, Juan; Sebastian, Raquel |
| Abstract: | We study perceptions of wealth inequality and preferences over the design of a wealth tax through representative online survey experiments in the United Kingdom and Spain (2023). After eliciting prior beliefs about the wealth distribution, we randomly expose respondents to true distributional statistics and measure the effects on support for a wealth tax and on its preferred design: threshold, rate and asset base. Baseline support is high and stable (over 80% in both countries), the modal preferred threshold is £/€1 million or more, a low (0.5%) rate is more acceptable than a high (1.5%) one, and respondents protect primary residences in both countries and pension wealth in the UK. The average treatment effect on support, threshold and rate is close to zero in both countries, reflecting a high-support ceiling and a weak link between perceived inequality and tax preferences. On average, respondents who correct their misperceptions update their view of inequality but not their support, a clear belief-to-preference dissociation. Information campaigns may shift beliefs about inequality but appear unlikely to broaden an already high overall support for wealth taxation. An analysis of subgroups by world-views reveals that information can move preferences about the exemption threshold -where the ceiling does not bind- and only in some Spanish groups: supporters who regard inequality as unfair and trust that taxation is useful and well spent. |
| Keywords: | wealth tax, tax threshold, redistribution preferences, information experiment, misperceptions, United Kingdom, Spain |
| JEL: | H24 D31 D83 C93 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2026-16 |
| By: | Jones, Jack |
| Abstract: | Across the UK, there exist two different sets of taxes based on property value. Council tax and transaction taxes such as Stamp Duty raise approximately £61.6 billion per year, and as such, there is little political appetite to replace them, despite their flaws. Council tax is particularly regressive due to a banding system, in which the amount owed has no proportional relationship with the current property value. Across Great Britain, council tax bands have not been updated since 2003 in Wales and 1991 in England and Scotland. The paper proposes a 0.75% annual levy based on property value. This property value would either be based on the value at purchase or on using an AVM to maintain an accurate valuation. The AVM revaluations would be performed every three years. The proposal is designed to be broadly revenue-neutral; however, it does generate a surplus of over £2 billion. The modelling showed that across England, Scotland, and Wales, the only group to face increased costs due to the levy were first-time buyers in mid-priced properties. As such, approximately £700 million of the surplus has been allocated to support first-time buyers with a 0% rate in the first year of ownership. The proposal also includes an escalation mechanism to target owners of multiple properties and a deferral mechanism to protect the most vulnerable. |
| Date: | 2026–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:jt9vy_v1 |
| By: | Manisha Jain; Corina Mommaerts; Jeffrey Weaver |
| Abstract: | Employer-side wage subsidies are widely used to promote employment among disadvantaged workers. We study how such subsidies translate into firm hiring behavior using the federal Work Opportunity Tax Credit, which subsidizes up to 40% of first-year wages and covers over two million hires annually. Using linked administrative data from Wisconsin and multiple quasi-experimental designs, we find consistent and precise null effects on hiring, earnings, retention, and related outcomes across designs and firm types. Original data on firm hiring practices suggest two mechanisms that can limit employer-side subsidy efficacy: perceived legal risks discourage eligibility screening and organizational frictions attenuate decision-makers’ responsiveness. |
| JEL: | H25 J38 M51 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35229 |
| By: | Pierre Le Brun (TELEMME - Temps, espaces, langages Europe méridionale-Méditerranée - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, ESPACE - Études des Structures, des Processus d’Adaptation et des Changements de l’Espace - UNS - Université Nice Sophia Antipolis (1965 - 2019) - AU - Avignon Université - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur, AU - Avignon Université); Sara Özoğul (University of Groningen [Groningen]); Sarah L Mawhorter (University of Groningen [Groningen]) |
| Abstract: | Fiscal geography illuminates the uneven ramifications of taxation policies on urban and regional development. In terms of housing governance, however, there remains a notable gap in examining how the spatial selectivity of taxation plays out across scales. This article highlights the interconnection between national regulation, housing market dynamics, and local governance systems. It examines how property development and local regulation have adapted to changes following the 2018 Finance Act in France, through which tax incentives for household rental investment were withdrawn from 1, 167 municipalities. We compare the metropolitan regions of Angers and Clermont-Ferrand, two French medium-sized cities. Detailed quantitative analysis shows that the 2018 Finance Act was followed by an increase in property development and prices in eligible municipalities, and a fall or stagnation in those losing eligibility. However, the regions' distinct local-level governance systems, uncovered through policy analysis and 15 interviews with public and private stakeholders, exhibit varying responses to these shifts. We argue that these differences are linked to local political strategies and can influence property development dynamics. The entrepreneurial, pro-development urbanism of Angers adapted through incentive tools aligned with national tax subsidies. In contrast, Clermont-Ferrand's more socially protective managerial urbanism responded by reinforcing regulatory constraints on development. We conclude by highlighting the importance of a multi-scalar perspective in fiscal geography for connecting taxation policies, housing markets, and local governance systems. |
| Keywords: | subsidized housing, housing regulation, property development, local governance, taxes, fiscal geography |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05628919 |
| By: | Ottmer, Henning (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | This paper examines a 1976 Swedish reform that lowered the normal retirement age (NRA) for public pensions from 67 to 65. The reform implied substantial increases in future pension benefits while leaving contribution rules unchanged. Using administrative data, I find sharp behavioral responses: employment at age 66 fell by 17 percentage points, or 47 percent relative to pre-reform levels, with little effect above the new NRA and modest effects below it. Exploiting variation across occupational pension schemes and reform timing, I use a set of back-of-the-envelope calculations to assess the relative importance of different mechanisms. The patterns are most consistent with behavioral responses and social norms playing a central role, while wealth effects appear to explain roughly one-fifth of the decline. I also provide suggestive evidence on employer-side factors, including automatic termination rules. The reform targeted an older age group than is typical in the literature on retirement ages, at a time when health and work capacity were more limited than today, making the findings relevant for contemporary policy settings in which increases in statutory retirement ages extend to older age. |
| Keywords: | Retirement; Retirement Policies; Social Security; Public Pensions |
| JEL: | H55 J26 |
| Date: | 2026–06–03 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2026_013 |
| By: | Anchi Xia |
| Abstract: | In this short note, I show that in a McCall (1970) model with risk-neutral agents, a system of wage insurance combined with unemployment insurance financed by a lump-sum tax on the employed can be replicated -- in the ex ante sense -- by a system of unemployment insurance that depends on the agent's wage when last employed and a tax that depends on the agent's wage when employed. This holds with or without endogenous search when unemployed. I also show that wage insurance is not binding until the last earned wage exceeds a threshold, which may be of independent interest. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.28562 |
| By: | Han Gao; Michael P. Keane; Kaja Kierulf; Alan Woodland |
| Abstract: | This paper estimates a learning-by-doing human-capital production function in which hours affect both current productivity and future human capital. We show that the standard Ben-Porath specification is weakly identified: its objective function is nearly flat along a ridge in parameter space, undermining conventional inference. We develop a flexible sieve alternative that is well-identified, and estimate a concave hours technology using PSID data. Embedding this technology in a life-cycle model, we find very small prime-age labor-supply responses to temporary wage shocks. Despite these low elasticities, optimal labor-income taxes are flat because they distort both current labor supply and future human-capital accumulation. |
| JEL: | C13 C14 H21 J22 J24 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35238 |