Emmanuel Saez’s research while affiliated with University of California, Berkeley and other places

To answer this question, we develop a new Sahm-type recession indicator that combines vacancy and unemployment data. The indicator is the minimum of the Sahm indicator -- the difference between the 3-month trailing average of the unemployment rate and its minimum over the past 12 months -- and a similar indicator constructed with the vacancy rate -- the difference between the 3-month trailing average of the vacancy rate and its maximum over the past 12 months. We then propose a two-sided recession rule: When our indicator reaches 0.3pp, a recession may have started; when the indicator reaches 0.8pp, a recession has started for sure. This new rule is triggered earlier than the Sahm rule: on average it detects recessions 1.4 months after they have started, while the Sahm rule detects them 2.6 months after their start. The new rule also has a better historical track record: it perfectly identifies all recessions since 1930, while the Sahm rule breaks down before 1960. With July 2024 data, our indicator is at 0.5pp, so the probability that the US economy is now in recession is 40%. In fact, the recession may have started as early as March 2024.

Modern tax systems do not satisfactorily tax the wealthiest individuals. Meanwhile, government revenue needs have increased in the wake of the Covid pandemic. This paper discusses ideas for new revenue sources focused on the top of the distribution: A progressive tax on net wealth with a high exemption threshold; a wealth tax on corporations' stock, and a one-off tax on top-end unrealized capital gains. Given the size and concentration of wealth, the revenue potential of these policies is significant.

This paper reviews recent developments in the theory and practice of optimal capital taxation. We emphasize three main rationales for capital taxation. First, the frontier between capital and labour income flows is often fuzzy, thereby lending support to a broad-based, comprehensive income tax. Next, the very notions of income and consumption flows are difficult to define and measure for top wealth holders where capital gains due to asset price effects dwarf ordinary income and consumption flows. Therefore the proper way to tax billionaires is a progressive wealth tax. Finally, as individuals cannot choose their parents, there are strong meritocratic reasons why we should tax inherited wealth more than earned income or self-made wealth for which individuals can be held responsible, at least in part. This implies that the ideal fiscal system should also include a progressive inheritance tax, in addition to progressive income and wealth taxes. We then confront our prescriptions with historical experience. Although there are significant differences, we argue that observed fiscal systems in modern democracies bear important similarities with this ideal triptych.

We propose to institute a new tax on corporations’ stock shares for all publicly listed companies and large private companies headquartered in G20 countries. Each of these companies would have to pay 0.2% of the value of its stock in taxes each year. As the G20 stock market capitalization is around 100% of world GDP, the tax would raise approximately 0.2% of world GDP in revenue. Because stock ownership is highly concentrated among the rich, this tax would be progressive. The tax could be paid in kind by corporations (by issuing new stock) so that the tax does not raise liquidity issue nor affect business operations. In today’s globalized and fast-moving world, companies can become enormously valuable once they establish market power, even before they start making large profits (e.g., Amazon and Tesla). This tax would make them start paying taxes sooner than standard income taxes.

Most governments are mandated to maintain their economies at full employment. We propose that the best marker of full employment is the efficient unemployment rate, $u^*$. We define $u^*$ as the unemployment rate that minimizes the nonproductive use of labor -- both jobseeking and recruiting. The nonproductive use of labor is well measured by the number of jobseekers and vacancies, $u + v$. Through the Beveridge curve, the number of vacancies is inversely related to the number of jobseekers. With such symmetry, the labor market is efficient when there are as many jobseekers as vacancies ($u = v$), too tight when there are more vacancies than jobseekers ($v > u$), and too slack when there are more jobseekers than vacancies ($u > v$). Accordingly, the efficient unemployment rate is the geometric average of the unemployment and vacancy rates: $u^* = \sqrt{uv}$. We compute $u^*$ for the United States between 1930 and 2022. We find for instance that the US labor market has been over full employment ($u < u^*$) since May 2021.

This paper describes the historical experience of wealth taxation in Europe and draws lessons from this history for wealth taxation in the twenty-first century. We show that the wealth tax base was narrow in European countries, due to large exemptions, tax avoidance, and evasion. The paper explains why such exemptions were granted and how they undermined the European wealth taxes. Drawing from this experience, we lay out the key design and enforcement features required for a successful wealth tax in the twenty-first century and compare this ideal wealth tax to proposals recently made in the United States.

This article first describes the main developments in measuring the upper tail of the income and wealth distributions over the last twenty years. Second, it points out some of the key methodological challenges and how better data could address them. Third, it discusses the academic and policy impacts of upper tail measurement.