Capital gains are *very* concentrated. Ranking people by their taxable gains (2017-18), the top 5,000 people received over half (54%) of all gains. For comparison, top 5,000 ranked by income received 2% of all income. The top 1,000 all got over £7mil each... 2/
Aggregate gains tripled during the 2010s, mostly driven by 'super gainers' who received over £1mil each. This resulted from Coalition government's 2011 decision to raise lifetime limit for 'Entrepreneurs Relief' from £1mil to £10mil. Gains mostly went to business managers. 3/7
In many cases, gains are effectively just repackaged income. The legal line between them is blurred. But gains are taxed at much lower rates, so there's a strong incentive to swap income for gains, for anyone who can. Again, this is mostly business managers. 4/7
Gains mostly go to people who already have high incomes. 9 in 10 people who were in the top1% by total remuneration (income+gains) were already in top1% by income only. But the 1 in 10 who 'join' the top1% have a lot of gains. So top shares are higher including gains. 5/7
This also changes picture of what happened to top-end inequality through 2010s. Looking at income only, it was mostly flat. But including gains, it went up (especially at very top). In other words, inequality didn't abate during austerity, just took a different form. 6/7
This also changes picture of what happened to top-end inequality through 2010s. Looking at income only, it was mostly flat. But including gains, it went up (especially at very top). In other words, inequality didn't abate during austerity, just took a different form. 6/7
This also changes picture of what happened to top-end inequality through 2010s. Looking at income only, it was mostly flat. But including gains, it went up (especially at very top). In other words, inequality didn't abate during austerity, just took a different form. 6/7
More results and discussion of the implications at the @resfoundation webinar, 11am today!



Policy briefing: https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/bn19.2020.pdf
Resolution Foundation report: https://www.resolutionfoundation.org/app/uploads/2020/05/Who-gains.pdf
Full working paper: https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/wp465.2020.pdf
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