IESET.
Hypotheses·distribution·tax_inequality_uk_50pct_rate_2010_2013

The UK's temporary 50 percent additional rate on income above GBP 150,000 (introduced April 2010, reduced to 45 percent April 2013) produced a large transitory dip in reported top-1 pretax income share via 2009-2010 realisation forestalling, with limited persistent effect once the realisation pull-back unwinds.

The HMRC 2012 elasticity-of-taxable-income evaluation estimated central ETI of 0.48; the discriminating test is whether reported top-1 share returns to trend by 2014 within HMRC's ETI band.

PARTIALengine/runs/tax_inequality_uk_50pct_rate_2010_2013

PARTIAL — shape=ITS, sign matches claim - but magnitude small (mean_gap=-4.02, z=-7.3)

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. shape=ITS, sign matches claim - but magnitude small (mean_gap=-4.02, z=-7.3)

why it matters

Distributional claims often sound morally clear but are empirically complex. This test asks whether the proposed channel explains real differences across places.

how the test works

It compares 1 country or place units from 2000 to 2018, using a event study design, with fixed effects for year.

what was measured
What changed
  • Forestalling window 2009 2010
  • Rate 50pct window 2010 2013
What we checked
  • Top 1pct pretax income share
  • Top 0p1pct pretax income share
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/tax_inequality_uk_50pct_rate_2010_2013
1007550250200020092018GBR
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show top_1pct_pretax_income_share across 1 sampled countries over 2000–2018.
The shapes above are stylised — none of the lines are real data.
Placeholder for tax_inequality_uk_50pct_rate_2010_2013. Published chart will be generated from engine/runs/tax_inequality_uk_50pct_rate_2010_2013/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-04-30T12:29:39Z

The UK's temporary 50 percent additional rate on income above GBP 150,000 (introduced April 2010, reduced to 45 percent April 2013) produced a large transitory dip in reported top-1 pretax income share via 2009-2010 realisation forestalling, with limited persistent effect once the realisation pull-back unwinds. The HMRC 2012 elasticity-of-taxable-income evaluation estimated central ETI of 0.48; the discriminating test is whether reported top-1 share returns to trend by 2014 within HMRC's ETI band.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if UK top-1 pretax share shows a clear 2009-2010 forestalling spike of at least 1 percentage point AND post-2014 reversion to within 0.5 percentage points of the 2007-2008 baseline at p<0.10. REFUTED if forestalling spike is below 0.3 pp or post-2014 share remains more than 1pp below baseline at p<0.10.

formal test & threshold
test:      UK time-series with explicit forestalling-window dummy 2009-2010 and structural breaks at 2010-Apr and 2013-Apr.

Method

Template
event_study
Fixed effects
year
Clustering
year
Sample
1 countries · 2000 – 2018
Evidence type
associational

Event study with two breaks 2010-Apr and 2013-Apr plus 2009-2010 forestalling dummy. HAC SEs.

Data

VariableSourceTransform
top_1pct_pretax_income_share
outcome
owid:top-1-share-of-total-incometier 2
level
top_0p1pct_pretax_income_share
outcome
owid:top-0-1-share-of-total-incometier 2
level
forestalling_window_2009_2010
treatment
constructed:indicator = 1 for fiscal-years 2009/10tier 5
indicator
rate_50pct_window_2010_2013
treatment
constructed:indicator = 1 for fiscal-years 2010/11 to 2012/13tier 5
indicator
top_marginal_income_tax_rate
treatment
owid:top-marginal-income-tax-ratetier 2
level
log_real_gdp
control
world_bank_wdi:NY.GDP.MKTP.KDtier 2
log
unemployment_rate
control
world_bank_wdi:SL.UEM.TOTL.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — tax_inequality_uk_50pct_rate_2010_2013

Verdict: PARTIAL — shape=ITS, sign matches claim - but magnitude small (mean_gap=-4.02, z=-7.3)

Pre-registration

  • Claim: The UK's temporary 50 percent additional rate on income above GBP 150,000 (introduced April 2010, reduced to 45 percent April 2013) produced a large transitory dip in reported top-1 pretax income share via 2009-2010 realisation forestalling, with limited persistent effect once the realisation pull-back unwinds. The HMRC 2012 elasticity-of-taxable-income evaluation estimated central ETI of 0.48; the discriminating test is whether reported top-1 share returns to trend by 2014 within HMRC's ETI band.
  • Falsification rule: SUPPORTED if UK top-1 pretax share shows a clear 2009-2010 forestalling spike of at least 1 percentage point AND post-2014 reversion to within 0.5 percentage points of the 2007-2008 baseline at p<0.10. REFUTED if forestalling spike is below 0.3 pp or post-2014 share remains more than 1pp below baseline at p<0.10.
  • Falsification test: UK time-series with explicit forestalling-window dummy 2009-2010 and structural breaks at 2010-Apr and 2013-Apr.
  • Event year: 2010

Estimate

  • shape: single_country_its
  • country: GBR
  • event_year: 2010
  • n_pre: 10
  • n_post: 7
  • pre_trend_slope: 0.3589090909090912
  • pre_trend_intercept: -706.0872727272736
  • pre_residual_sd: 0.5476963694706292
  • end_year: 2018
  • end_year_actual: 13.07
  • end_year_counterfactual: 18.191272727272462
  • end_year_gap: -5.121272727272462
  • mean_post_gap: -4.019766233765933
  • z_end: -9.350569061143094
  • z_mean: -7.339406389805359
  • post_period_years: [2010, 2018]

Variables resolved

  • owid:top-1-share-of-total-income → top_1pct_pretax_income_share (outcome, publisher=owid, n=3294)
  • owid:top-marginal-income-tax-rate → top_marginal_income_tax_rate (treatment, publisher=owid, n=590)
  • world_bank_wdi:NY.GDP.MKTP.KD → log_real_gdp (controls, publisher=world_bank_wdi, n=14066)
  • world_bank_wdi:SL.UEM.TOTL.ZS → unemployment_rate (controls, publisher=world_bank_wdi, n=8071)

Variables missing data

  • owid:top-0-1-share-of-total-income (outcome, name=top_0p1pct_pretax_income_share)
  • constructed: indicator = 1 for fiscal-years 2009/10 (treatment, name=forestalling_window_2009_2010)
  • constructed: indicator = 1 for fiscal-years 2010/11 to 2012/13 (treatment, name=rate_50pct_window_2010_2013)

Generated by scripts/run_event_study.py at 2026-04-30T12:29:39+00:00

Notes

Tax-inequality candidate, swarm-S6 batch 4. Tests HMRC 2012 official ETI estimate against post-2014 reversion data.

Authored framework. Read the transparency note.