The Distribution of Top Incomes in Five Anglo- Saxon Countries Over the Long Run The Distribution of Top Incomes in Five Anglo- Saxon Countries Over the Long Run.

Taking five Anglo- Saxon countries that have relatively similar backgrounds and tax systems - Australia, Canada, New Zealand, the UK and the USA - we see that the shares of the very richest exhibit a strikingly similar pattern, falling in the three decades after World War II, before rising sharply from the mid-1970s onwards. The share of the top 1 per cent is highly correlated across Anglo- Saxon countries, more so than with the share of the next 4 per cent. Controlling for country and year fixed effects, we find that a reduction in the marginal tax rate on wage income is associated with an increase in the share of the top percentile group. Likewise, a fall in the marginal tax rate on investment income (based on a lagged moving average) is associated with a rise in the share of the top percentile group. [ABSTRACT FROM AUTHOR]