Economics Digest

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FORUM

A model, developed to explore the consequence for taxation and regulation of bonus pay when investors are protected by taxpayers from downside risk, shows that the optimal structure of bonuses can be implemented by a combination of a regulation on the structure of bonuses and a tax on their level. Besley, Timothy and Maitreesh Ghatak , 2011, “Taxation and regulation of bonus pay”, CEPR Industrial Organization and Public Policy Working Paper No. 8532 http://www.opusej.org/library/taxation-and-regulation-of-bonus-pay-cover/

Study explores this increased dispersion at the very top of the wage distribution which shows that the growth has occurred primarily within the top few percentiles and that the inequality is particularly skewed by the bonus pay structure epitomized by bankers. Bell, Brian and John Van Reenen (2010), “Bankers. Bonuses and Extreme Wage Inequality in the UK”, CEP Special Report No. 21. http://www.opusej.org/library/bankers-bonuses-and-extreme-wage-inequality-in-the-uk-cover/

A study of the rise of the top end of the income distribution is skewed, with bankers and other financial top executives (Wall Street) representation disproportionately higher than non-financial executives (Main Street). Kaplan, Steven N. and Joshua Rauh, 2010, “Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?”, Rev. Financ. Stud. 23:3, 1004-1050. doi: 10.1093/rfs/hhp006. published online: March 3, 2009 http://www.opusej.org/library/wall-street-and-main-street-what-contributes-to-the-rise-in-the-highest-incomes-cover/

READING LIST

Spending on children from the early 1970s to the late 2000s has increased substantially in large part because parents’ spending on education increased substantially, particularly among those near the top of the income distribution and the college-educated thereby promoting the income gap. Kornrich, S & Furstenberg, F, 2013, “Investing in Children: Changes in Parental Spending on Children, 1972–2007”, Demography 50:1, 1-23. http://paa2011.princeton.edu/papers/110077

Support for austerity by Reinhart and Rogoff  is contradicted in a review of their own data and methods. Herndon, T, M Ash & R Pollin, 2013, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff”, PERI 2013-4-15, 1-25. http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf

Analysis of research supports recommendations that; very high earners should be subject to high and rising marginal tax rates on earnings, low-income families should be encouraged to work with earnings subsidies and capital income should be taxed. Diamond, Peter and Emmanuel Saez, 2011, “The Case for a Progressive Tax: From Basic Research to Policy Recommendations,” Journal of Economic Perspectives 25:4,165-190. http://elsa.berkeley.edu/~saez/diamond-saezJEP11full.pdf

A model, developed to explore the consequence for taxation and regulation of bonus pay when investors are protected by taxpayers from downside risk, shows that the optimal structure of bonuses can be implemented by a combination of a regulation on the structure of bonuses and a tax on their level. Besley, Timothy and Maitreesh Ghatak , 2011, “Taxation and regulation of bonus pay”, CEPR Industrial Organization and Public Policy Working Paper No. 8532 http://www.opusej.org/library/taxation-and-regulation-of-bonus-pay-cover/

A study of the rise of the top end of the income distribution is skewed, with bankers and other financial top executives (Wall Street) representation disproportionately higher than non-financial executives (Main Street). Kaplan, Steven N. and Joshua Rauh, 2010, “Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?”, Rev. Financ. Stud. 23:3, 1004-1050. doi: 10.1093/rfs/hhp006. published online: March 3, 2009 http://rfs.oxfordjournals.org/content/23/3/1004.abstract

Study explores this increased dispersion at the very top of the wage distribution which shows that the growth has occurred primarily within the top few percentiles and that the inequality is particularly skewed by the bonus pay structure epitomized by bankers. Bell, Brian and John Van Reenen (2010), “Bankers. Bonuses and Extreme Wage Inequality in the UK”, CEP Special Report No. 21. http://www.opusej.org/library/bankers-bonuses-and-extreme-wage-inequality-in-the-uk-cover/

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