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The evolution of top incomes in Switzerland over the 20th century

Summary

We study the income concentration in the Swiss federation over the course of the 20th century using federal income tax statistics. The results suggest that top incomes in Switzerland evolved over time rather remaining constant across different income shares. Income concentration peaked during the 1940s, with a slight downward trend until the 1990s. Over the last 15 years, top incomes have recovered. In contrast, the evolution of income concentration is much more heterogeneous on the sub-federal level for the 26 cantons because of the federalist constitution, which has a decentralized taxing power. Consequently, top incomes in some cantons have a downward trend; others show a fall and rise of top incomes over the century, as exemplified by the Kuznets’ hypothesis; some develop rather constantly; and some cantons even produce a striking upward trend.

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Correspondence to Christoph A. Schaltegger.

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We are grateful for helpful comments by participants of the annual meeting of the Swiss Society of Economics and Statistics SSES 2011 in Lucerne, participants of a research seminar at the University of Basel and to Bruno Jeitziner and Roger Ammann both from the Swiss Federal Tax Administration (ESTV) for their comments and extensive data support.

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Schaltegger, C.A., Gorgas, C. The evolution of top incomes in Switzerland over the 20th century. Swiss J Economics Statistics 147, 479–519 (2011). https://doi.org/10.1007/BF03399357

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  • DOI: https://doi.org/10.1007/BF03399357

JEL-Classification

  • D31
  • H2
  • N3

Keywords

  • Income inequality
  • Income inequality
  • Top incomes
  • Taxation