Tax Incidence among the Working Superrich.Evidence From the French 75% Tax on Millionaires
The paper documents the tax incidence on the working superrich. I use the 75% tax on millionaire implemented in France as a natural experiment increasing labour cost of millionaires by 10p.p.t. Relying on complete administrative data, I document that the tax was largely borne by employers, who paid 80% of the tax, but that the removal of the tax benefit employees through an increase in net wage. Importantly, the incidence depends on occupations. Last, there is suggestive evidence that top executive were able to avoid the tax through non taxed-compensation. If the short term findings are valid in the long term, a permanent 75% tax would have been tax-revenue increasing. Yet, the removal of the tax triggered a increase in inequality with the labour costs staying at the tax-years level.