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Stephen: "...top earners are price takers."

I want to make sure I understand this. Does it mean:

1. The demand curve facing top earners as a group is perfectly elastic? So all the incidence of a tax on top earners is borne by the top earners themselves.

2. The demand curve facing an *individual* top earner is perfectly elastic? So there's a competitive market for top-earners, with a regular downward-sloping demand curve, and the tax incidence falls on both sides of the market, but each individual top earner takes that equilibrium wage as given.

In the first paper, it looks like 2: tax rates on the RHS, reported earnings on the LHS. In the second paper, there is a bargaining model where rents are divided. But since they're rents, there's no behavioural response when they're taxed at a higher rate.

These results seem built into the models, though I may have it wrong. The word 'incidence' doesn't seem to appear in either paper.

"But they also coincide with a general increase in firm values, which is consistent with a narrative in which executives are being rewarded for generating shareholder value." Didn't a lot of executives get rewarded whether their firms increased in value or not? Don't Japanese executives, successful or not, earn a lot less than their American counterparts?

Why is it that so many studies used in the high-earner-tax/inequality debate start their analyses' in the 1970s? The Kennedy/Johnson cuts never get any love.

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