Progressive taxes and top income shares: A historical perspective on pre- and post-tax income concentration in Switzerland

•This study provides new data about pre- and post-tax top income shares in Switzerland, from the 1945-2012 period.•The development differs considerably among the top income groups.•The highest-income households are able to avoid increased cantonal redistribution by self-sorting into low-tax cantons.•The lower-level top income groups benefit from tax policy changes.•Despite fiscal federalism, post-tax income concentration has been exceptionally stable in Switzerland.

The literature on income concentration largely focuses on pre-tax income; the current study provides new data concerning both pre- and post-tax top income shares in Switzerland, from the 1945-2012 period. Redistribution due to progressive income taxes increased until the 1970s, and since then, the highest-income households have avoided increased cantonal income taxes by taking residence in low-tax cantons. Lower-level top income groups are less mobile than the highest-level groups, but have benefited from tax policy reforms since the 1980s. Nonetheless, despite fiscal federalism, redistribution and post-tax income concentration have been exceptionally stable in Switzerland.