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In this article, I present three key facts about income and wealth inequality in the long run emerging from my book Capital in the Twenty-First Century and seek to sharpen and refocus the discussion about those trends. In particular, I clarify the role played by r > g in my analysis of wealth inequality. I also discuss some of the implications for optimal taxation, and the relation between capital-income ratios and capital shares.

We study the effects of progressive labor income taxation in an otherwise standard New Keynesian (NK) model. We show that progressive taxation (i) introduces a trade-off between output and inflation stabilization and affects the slope of the Phillips Curve, (ii) acts as automatic stabilizer changing the responses to technology shocks and demand shocks, and (iii) alters the prescription for the optimal monetary policy. The welfare gains from commitment decrease as labor income taxes become more progressive. Quantitatively, the model reproduces the observed negative correlation between the volatility of output, hours, and inflation and the degree of progressivity of labor income taxation.

Unlocking the complexities of individual tax residence is crucial for navigating both domestic and international income taxation.However, Brazil's current tax residence rules have fallen behind the pace of technological advancements and cultural shifts over the past century, leading to significant uncertainties.

The papers in this volume explore the idea of distributive justice and fairness in taxation. The collection begins with Head’s excellent presentation and analysis of equity in the public finance literature. The other authors, starting from this point, critique and amplify the concept from various philosophical perspectives and academic disciplines. 

We quantitatively characterize the optimal capital and labor income tax in an overlapping generations model with idiosyncratic, uninsurable income shocks and permanent productivity differences of households. The optimal capital income tax rate is significantly positive at 36 percent. The optimal progressive labor income tax is, roughly, a flat tax of 23 percent with a deduction of $7,200 (relative to average household income of $42,000). The high optimal capital income tax is mainly driven by the life-cycle structure of the model, whereas the optimal progressivity of the labor income tax is attributable to the insurance and redistribution role of the tax system.

This research analyses trends in progressive taxation across the European Union (EU) from 2000 to 2024. Using the Web of Science (WoS) database, the methodological approach integrates a co-occurrence of keyword analysis processed through VOSViewer 1.6.20 (VOS), allowing for a structured mapping of dominant discussions in the field. Unlike previous studies, which primarily emphasise statistical modelling or comparative legal frameworks, this research provides an in-depth human-centred evaluation of the main topics. By carefully examining the evolution of scholarly discourse, the study uncovers nuanced shifts in taxation debates, emerging policy trends, and interdisciplinary linkages that may have been overlooked in automated assessments. The findings contribute to a more comprehensive understanding of how progressive taxation has evolved in response to economic crises, political shifts, and fiscal integration efforts within the EU in the last two decades. However, this study is limited by its reliance on author-defined keywords from the selected database, the interpretative nature of keyword co-occurrence analysis, and the inherent subjectivity of qualitative article review, without additional empirical validation to support the findings.

Midcentury America was governed from the center, a bipartisan consensus of politicians and public opinion that supported government spending on education, the construction of a vast network of interstate highways, healthcare for senior citizens, and environmental protection. These projects were paid for by a steeply progressive tax code, with a top tax rate at one point during the Republican Eisenhower administration of 91 percent. Today, a similar agenda of government action (and progressive taxation) would be portrayed as dangerously left wing. At the same time, radically anti-government and anti-tax opinions (with no evidence to support them) are considered part of the mainstream. In Take Back the Center, Peter Wenz makes the case for a sane, reality-based politics that reclaims the center for progressive policies. The key, he argues, is taxing the wealthy at higher rates. The tax rate for the wealthiest Americans has declined from the mid-twentieth-century high of 91 percent to a twenty-first-century low of 36 percent--even as social programs are gutted and the gap betweeen rich and poor widens dramatically. Ever since Ronald Reagan famously declared that government was the problem and not the solution, conservatives have had an all-purpose answer to any question: smaller government and lower taxes. Wenz offers an impassioned counterargument. He explains the justice of raising the top tax rates significantly, making a case for less income inequality (and countering society's worship of the wealthy), and he offers suggestions for how to spend the increased tax revenues: K-12 education, tuition relief, transportation and energy infrastructure, and universal health care. Armed with Wenz's evidence-driven arguments, progressives can position themselves where they belong: in the mainstream of American politics and at the center of American political conversations, helping their country address a precipitous decline in equality and quality of life.

The Theory of Taxation and Public Economicspresents a unified conceptual framework for analyzing taxation--the first to be systematically developed in several decades. An original treatment of the subject rather than a textbook synthesis, the book contains new analysis that generates novel results, including some that overturn long-standing conventional wisdom. This fresh approach should change thinking, research, and teaching for decades to come. Building on the work of James Mirrlees, Anthony Atkinson and Joseph Stiglitz, and subsequent researchers, and in the spirit of classics by A. C. Pigou, William Vickrey, and Richard Musgrave, this book steps back from particular lines of inquiry to consider the field as a whole, including the relationships among different fiscal instruments. Louis Kaplow puts forward a framework that makes it possible to rigorously examine both distributive and distortionary effects of particular policies despite their complex interactions with others. To do so, various reforms--ranging from commodity or estate and gift taxation to regulation and public goods provision--are combined with a distributively offsetting adjustment to the income tax. The resulting distribution-neutral reform package holds much constant while leaving in play the distinctive effects of the policy instrument under consideration. By applying this common methodology to disparate subjects,The Theory of Taxation and Public Economicsproduces significant cross-fertilization and yields solutions to previously intractable problems.

Economic inequality is a collective issue that affects all citizens. However, people often fail to support redistribution strategies aimed at redressing inequality. In this work we investigated personal optimism and collective pessimism as psychological processes that contribute to hampering vs. promoting the demand for redistribution. Our prediction was that support for redistribution would require both a pessimistic economic outlook at the collective level and the perception of being economically disadvantaged. In two studies, one of which pre-registered, Italian participants (Study 1: N = 306; Study 2: N = 384) were led to feel relatively poor or rich, rated their perceived control over either their personal or the nation's future and estimated either personal or national economic and general future risks. To measure support for redistribution, participants were invited to allocate their desired level of taxation to each of the five tax brackets included in the Italian personal income tax. Results showed that participants were optimistic about their personal future, but pessimistic about the fate of their nation. This difference was explained by respondents' greater perceived control over personal future than over the nation's future. Importantly, greater pessimism about national economic risks led to greater support for progressive taxation only for participants who felt relatively poor.

In this article we use an original data set to provide the first empirical analysis of the political economy of inherited wealth taxation that covers a significant number of countries and a long time frame (1816–2000). Our goal is to understand why, if inheritance taxes are often very old taxes, the implementation of inheritance tax rates significant enough to affect wealth inequality is a much more recent phenomenon. We hypothesize alternatively that significant taxation of inherited wealth depended on (1) the extension of the suffrage and (2) political conditions created by mass mobilization for war. Using a difference-in-differences framework for identification, we find little evidence for the suffrage hypothesis but very strong evidence for the mass mobilization hypothesis. Our study has implications for understanding the evolution of wealth inequality and the political conditions under which countries are likely to implement policies that significantly redistribute wealth and income.