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    Top Income Shares, Business Profits, and Effective Tax Rates in Contemporary Chile

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    Date
    2015-04-10
    Author
    Jorratt De Luis, Michel
    Fairfield, Tasha
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    Abstract
    We contribute to research on inequality and world top incomes by presenting the first calculations of Chilean top income shares and effective tax rates using individual tax return microdata from 2005 and 2009. We pay special attention to business income, which dominates at the top. Our analysis includes not only distributed profits, but also the large proportion of accrued profits retained by firms, which are rarely analyzed given the difficulty of identifying individual owners. Our most conservative top 1 percent income‐share estimate is 15 percent—the fifth highest in the top incomes literature. When distributed profits are adjusted for evasion, the top 1 percent share reaches 22–26 percent. When we broaden the income concept to include accrued profits, which we impute to taxpayers using ownership shares calculated from business tax forms, the top 1 percent share increases to a minimum of 23 percent. Despite this impressive income concentration, the top 1 percent pays modest average effective income‐tax rates of 15–16 percent.
    URI
    https://opendocs.ids.ac.uk/opendocs/handle/20.500.12413/13744
    Citation
    Fairfield, T. and Jorratt De Luis, M. (2015) Top Income Shares, Business Profits, and Effective Tax Rates in Contemporary Chile, The Review of Income and Wealth; Vol 62
    DOI
    https://doi.org/10.1111/roiw.12196
    Is part of series
    The Review of Income and Wealth;Vol 62
    More details
    https://onlinelibrary.wiley.com/doi/pdf/10.1111/roiw.12196
    Rights holder
    © International Association for Research in Income and Wealth
    Rights details
    http://www.ids.ac.uk/files/dmfile/IDSOpenDocsStandardTermsOfUse.pdf
    Collections
    • Journal Articles - External [389]
    • International Centre for Tax and Development [394]

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