EH.Net Abstracts in Economic History

                ABSTRACTS IN ECONOMIC HISTORY
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Name: Facundo Alvaredo
Email: alvaredo at pse.ens.fr
Institution: Paris School of Economics

Co-author: Emmanuel Saez, University of California-Berkeley

Title: Income and Wealth Concentration in Spain in a Historical and 
Fiscal Perspective

Internet Address of abstracted work: 
http://www.cepr.org/Pubs/new-dps/dplist.asp?dpno=5836

By mail: not available

Language: English

Abstract:
This paper presents series on top shares of income and wealth in 
Spain over the 20th century using personal income and wealth tax 
return statistics. Top income shares are highest in the 1930s, fall 
sharply during the first two decades of the Franco dictatorship, and 
have increased slightly since the 1960s, and especially since the 
mid-1990s. The top 0.01% income share in Spain estimated from income 
tax data is comparable to estimates for the United States and France 
over the period 1933-1971. Those findings, along with a careful 
analysis of all published tax statistics, suggest that income tax 
evasion and avoidance among top income earners in Spain before 1980 
was much less prevalent than previously thought. Wealth concentration 
has been about stable from 1982 to 2004 as surging real estate prices 
have benefited the middle class and compensated for a slight increase 
in financial wealth concentration in the 1990s. We use our wealth 
series and a simple conceptual model to analyze the effects of the 
wealth tax exemption of stocks for owners managers introduced in 
1994. We show that the reform induced substantial shifting from the 
taxable to tax exempt status. This shifting has eroded the wealth tax 
base substantially and hence the tax exemption has generated large 
efficiency costs.

Keywords: income, wealth inequality
JEL: D3, H3


Bibliography: Alvarez, Facunda and Emmanuel Saez. "Income and Wealth 
Concentration in Spain in a Historical and Fiscal Perspective." CEPR 
Discussion Paper No. 5836. 2007.

Subject: Q
Geographical Area: 4
Country/Region: Spain
Time Period: 8, 9

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