WEBINAR This has focused policy attention on the su- Taxing the superrich perrich. Various political and economic ar- guments for at least partially offsetting this UBS Foundation Professor Florian Scheuer rise in inequality have been put forward. In particular, politicians have called for increas- Based on his research on taxation, UBS Foun- ing the tax burden on rich households, both dation Professor Florian Scheuer explores the Spotlight in the form of higher top rates for existing in- various approaches of how to tax the super- come taxes as well as new tax levies targeting Knowledge hub rich more effectively as a measure to create the superrich. Most prominently, the idea of The Center’s video library a fairer tax system. His data show not only introducing an annual wealth tax has recently includes recording of all public great differences in income and wealth ine- gained attention in the United States. events, short video summaries of qualities, but also in tax systems and policies The Public Paper provides an overview publications, and much more. across OECD countries. These differences of the tax situation the superrich currently are interlinked with the way the superrich face and evaluates various reform proposals. 2020 are taxed in different countries, especially re- garding income and wealth. Scheuer provides an overview of the tax situation the superrich currently face and evaluates various reform PUBLIC PAPER proposals. He also reviews the pros and cons of wealth taxes versus alternative policies that Disappearing achieve similar objectives – such as Joe Biden’s reform plans for the US tax system. Conclud- ing, Scheuer identifies a possible solution for middle class fixing capital taxation, suggesting a retrospec- Nir Jaimovich ment are met, we would be nowhere near the tive accrual tax where the statutory tax rate Public 2-degree limitation. Nordhaus identifies the rises with the holding period, but the tax is The creeping hollowing out free-rider problem as the biggest challenge for only assessed upon realization of capital gains. of the middle class and the global agreements to work, since the agree- simultaneous rise of au- dialogue ments are voluntary and without penalties PANEL DISCUSSION tomation have become for non-participation. To solve the free-rider Inequality – hotly debated topics in the problem, Nordhaus suggests forming a “cli- facts and consequences popular media and among mate club” among countries. The club struc- policy makers, and there ture aims to overcome free-riding as members Janet Currie, David Dorn, Branko Milanovic is certainly no shortage “pay dues” through costly abate- of dire predictions about Research insights on economic inequality and ments. At the same time, costly the ascent of robots and subsequent obsoles- its consequences take center stage in this dis- penalties are applied to non-par- cence of workers. But – doomsday prophecies cussion panel, bringing together three experts ticipants, e.g., in form of trade aside – what are the facts? What is happen- with multiple perspectives. While Branko Mi- tariffs. ing to workers, specifically middle-class ones? lanovic’s historical data show that the rise of And, from a policy perspective, what can (or Asia has led to a decrease in global inequali- should) be done to address this fundamental ty in the past decade and that the growth of shift in who – or what – does which jobs? the global top 1% has slowed down in recent WEBINAR This Public Paper tackles these questi- years, the discussants agree that overall, in- 29.4.2020 ons head-on. The author first identifies the equality is still very high. Janet Currie ar- types of individuals who are likely to work gues that there is too much inequality, when in middle-class occupations and tracks how Corona crisis there is a privileged group that can separate they act on the labor market outcomes. Then itself from a deteriorating public service, say In the media he evaluates policies proposed in recent years Switzerland through private hospitals or schools. UBS that have been aimed at combating the labor Foundation Professor David Dorn emphasizes market malaise middle-class workers have The Center’s affiliated researchers actively par- that the threshold – when inequality is clearly experienced. ticipate in public discussions on current issues harmful – is reached when some large income and provide expert advice to government or- groups cannot profit anymore from the overall ganizations and decision makers. growth in the country, like currently in the US. Finally, they discuss whether the corona Coronavirus pandemic will increase inequality or whether Our researchers are involved in public analysis it might even accelerate the progressive reduc- and discussion in national and international “It is a situation in which one tion of global inequality. Research media. Based on research results and econom- should not only look for the help of ic models, they provide assessments of the eco- the state. In fact, even the individ- KEYNOTE nomic consequences in connection with the Inequality and the future corona crisis. In addition to contributions ual can do a lot to slow down the from their respective areas of expertise, they spread of the virus through changes of capitalism have published a joint position paper together in behavior.” with all professors of the Department of Eco- nomics at UZH. This paper summarizes the UBS Foundation Professor David Dorn consensus of the economic debate and outlines options for action for Switzerland. The coronavirus has put the world in a state of emergency. During the first wave, Switzer- US presidential elections land took far-reaching measures to stop the Which president is better for the global econ- virus from spreading. Back then, it was un- omy? Globalization, trade and labor expert certain how the situation would develop after “Enormous corporate power is David Dorn gives an assessment of the conse- the lockdown. In the webinar, UBS Founda- undermining competition and quences of the presidential election in the US. tion Professor David Dorn and cardiologist and immunologist Paul Mohacsi discussed transferring resources upwards, Top five He also explains why the economic decline from poor to rich.” of some regions in the US has deepened the how a gradual relaxation can be publications ideological divide, amplifying polarization. achieved considering economic and Nobel laureate Sir Angus Deaton medical aspects. This event was carried out in cooperation with our The Center’s researchers regularly publish Social mobility takes generations In his presentation, Sir Angus Deaton talks partner OEC Alumni UZH. their work in leading economics journals. While differences in income and wealth can about the advantages and disadvantages of be justified, low social mobility seems diffi- capitalism and the inequalities that result Autor, David, David Dorn, Gordon Hanson, cult to accept in meritocratic societies. Eco- from it. He emphasizes that capitalism has and Kaveh Majlesi. 2020. “Importing Politi- nomic historian Joachim Voth explains why FORUM FOR ECONOMIC DIALOGUE brought great prosperity in the past, even cal Polarization? The Electoral Consequenc- many people today are no better off than their OCT. / NOV. 2020 to poor countries. But the system has flaws es of Rising Trade Exposure.” American parents and why – as long as the rules of the that need to be fixed, such as the health care Economic Review, 110 (10): 3139–83. game remain broadly the same – system in the US. Thus, Deaton concludes, one should not have overly high Rethinking we need to repair capitalism through better Autor, David, David Dorn, Lawrence expectations of changes in the regulations and restore competition by fixing F. Katz, Christina Patterson, and John Van income position, even in a mer- inequalities antitrust, re-orienting the courts, campaigning Reenen. 2020. “The Fall of the Labor itocratic environment. We look back on an extraordinary edition of finance reform, enforcing rules on lobbying, Share and the Rise of Superstar Firms.” the annual UBS Center Forum. For the first and eliminating tax havens. The Quarterly Journal of Economics, time, the event took place online, spread over Volume 135, Issue 2: 645–709. four weeks. We were overwhelmed by the enormous resonance that Baranov, Victoria, Sonia Bhalotra, Pietro Events 2020 the event series has generated. Biroli, and Joanna Maselko. 2020. “Mater- It proves how topical and im- Center nal Depression, Women’s Empowerment, portant the debate on inequality is. and Parental Investment: Evidence from a KEYNOTE publications Randomized Controlled Trial.” American 21.1.2020 RESEARCH SLAM Economic Review, 110 (3): 824–59. (In-)Equality and prosperity The Public Paper series makes Bursztyn, Leonardo, Alessandra L. With several UZH researchers research on topics of key social The economics of González, and David Yanagizawa-Drott. relevance available to a broader 2020. “Misperceived Social Norms: Women What better way to open an event series on in- audience in a simplified, compact, climate change Working Outside the Home in Saudi Ara- equality than with a firework of different short and highly readable format. bia.” American Economic Review, 110 (10): presentations on the topic? The 35-minutes 2997–3029. session is packed with insights from ongoing research on different aspects of inequality. PUBLIC PAPER Epper, Thomas, Ernst Fehr, Helga Fehr-Duda, The first talk provides a political perspective, Claus Thustrup Kreiner, David Dreyer showing how