'Tax the rich'? The financial crisis, fiscal fairness, and progressive income taxation. Issue 3 (19th August 2019)

• Record Type: Journal Article
• Authors: Limberg, Julian
• Is Part Of: European political science review. Volume 11:Issue 3(2019)
• Page Start: 319
• Page End: 336
• Publication Date: 2019-08-19
• Subjects: political economy, -- inequality, -- taxation, -- financial crisis, -- redistribution; Politics, Practical -- Europe -- Periodicals; European Union countries -- Politics and government -- Periodicals; 320.09405
• DOI: 10.1017/S1755773919000183
• Languages: English
• ISSNs: 1755-7739

Abstract

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.