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

76 Pages Posted: 14 Nov 2006

See all articles by Facundo Alvaredo

Facundo Alvaredo

Ecole Normale Superieure (PSE-ENS)

Emmanuel Saez

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: September 2006

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, as well as employment income statistics. Top income shares are highest in the 1930s in spite of substantial individual income tax evasion biasing down our estimates. This suggests that income inequality was much higher in the pre-civil war period than it is today. Employment income concentration was moderate in the 1960s and 1970s and dropped sharply from 1975 to 1977 during the transition to democracy. Top income shares have increased significantly since the mid-1990s due to an increase in wage income concentration and a surge in realized capital gains. Financial wealth concentration has also increased in the 1990s but real estate prices have increased sharply as well. As real estate wealth is less concentrated than financial wealth, on net, top wealth shares have declined slightly during the period 1982-2002. The wealth tax exemption of stocks for owners-managers since 1994 has gradually eroded by almost 40% the taxable wealth at the top, creating a very serious loophole in the wealth tax as well as large efficiency costs.

Keywords: Income, wealth inequality

JEL Classification: D3, H3

Suggested Citation

Alvaredo, Facundo and Saez, Emmanuel, Income and Wealth Concentration in Spain in a Historical and Fiscal Perspective (September 2006). CEPR Discussion Paper No. 5836, Available at SSRN: https://ssrn.com/abstract=944871

Facundo Alvaredo (Contact Author)

Ecole Normale Superieure (PSE-ENS) ( email )

48 Boulevard Jourdan
75014 Paris
France

Emmanuel Saez

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States
510-642-4631 (Phone)
510-642-6615 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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