Macroeconomic Implications of Top Income Tax Cuts: 1960 - 2010

Wednesday 4 March 2015, 1.00PM to 2:00pm

Speaker(s): Markus Poschke, McGill University

Abstract: Over the last 50 years the US tax system went through a striking transformation that considerably reduced the effective tax rates for top income groups. This paper investigates the macroeconomic repercussions of this change in tax policy, particularly for the distributions of income, wealth, consumption and welfare. The results suggest that top income tax cuts explain up to 40% of the rise in wealth inequality since 1960. By contrast, the impact of tax cuts on income and consumption inequality is much smaller due to changes in equilibrium prices.

Location: ARRC Auditorium (A/RC014)

Admission: All welcome.