The Race to The Bottom, Competitiveness and Inequality
Posted by I Wayan Agus Eka on December 18, 2017
This is the original version of my article published in The Jakarta Post. In this version i will only add several graphs that was eliminated in the published version. Hopefully it will add more understanding for the reader.
Pictures below show how the race to the bottom phenomenon evolves in the last 15 years.
Source:
- based on data from KPMG
- the country’s grouping is based from World Bank data
- tax heaven country classification is based from Jane G. Gravelle, “Tax Havens: International Tax Avoidance and Evasion, Congressional Research Service Report, No. 7-5700/R40623 (2015), Table 1.
The graph below shows the correlation, if we can’t say an accusation, between the progressivity of tax (represented by the top marginal income tax rate (MITR)-left scale) and wealth accumulation (proxied by income share for the top 1% earner-right scale) in the US for period 1913 – 2013.
Source:
- for MITR: http://piketty.pse.ens.fr/en/capital21c2
- for Post-tax income: http://wid.world/data/
I Wayan Agus Eka
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