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Title: Income tax progressivity and inflation during the world wars
Author: Torregrosa-Hetland, Sara
Sabaté Domingo, Oriol
Keywords: Guerra Mundial I, 1914-1918
Guerra Mundial II, 1939-1945
Impost sobre la renda de les persones físiques
World War, 1914-1918
World War, 1939-1945
Personal income tax
Issue Date: 1-Aug-2022
Publisher: Oxford University Press
Abstract: This paper studies the impact of inflation on income taxes in Sweden, the UK, and the United States during the world wars. As tax reforms were rising top marginal rates and reducing exemption thresholds, extraordinary levels of inflation eroded the real value of exemptions, brackets, and deductions. The micro-simulation of actual and alternative scenarios shows that inflation made the tax less progressive, particularly in Sweden during World War I and the UK during World War II. Nevertheless, its redistributive effect increased due to the related growth in tax revenue. Inflation contributed to transform a 'class tax'' into a 'mass tax'.
Note: Reproducció del document publicat a:
It is part of: European Review of Economic History, 2022, vol. 26, num. 3, p. 311-339
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ISSN: 1361-4916
Appears in Collections:Articles publicats en revistes (Història Econòmica, Institucions, Política i Economia Mundial)

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