I created these graphs to show the change in the share of income going to the top 0.1%, comparing the United States to Canada, United Kingdom, France, and Japan from 1913-2004.
{Click on the graph to take a closer look}
The effect by the two World Wars is clear but what is more subtle is the effect on the share of income going to the very wealthy due to the change in the top income tax rate. This could be due to attempts by the very wealthy to hide their income from the IRS or else having a higher tax rate will impact the distribution of income or both. I didn’t have the marginal rates for the other countries but it would be interesting to see if they have a similar relationship between the share of total income captured by the Top 0.1 percent and income tax rates.
The income data can be found here on Emmanuel Saez’s web site. I found the marginal tax rate for the United States in the SOI Bulletin Historical Table A at the IRS site via truthandpolitics.org
[tags]income distribution, marginal tax rate[/tags]
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