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The paper provides a critical review of the literature on the concept of progressivity in the taxation of petroleum and mineral resources and offers a fresh perspective on its purpose and measurement. Regressive taxes, such as royalties, exist to satisfy policy objectives other than revenue maximization, such as achieving early revenues, while rent-based or profit-sensitive fiscal instruments must be designed with progressive marginal rates to maximize government revenues. Hence, the emphasis should be placed on tax rate progression of the direct taxation of profit or rent, rather than progressivity in the overall government take. However, as regressive taxes, by their very nature, tend to be distortionary, the optimal degree of progression in the rent- or profit-tax rates must take these distortions into account. The central ideas are illustrated with a simple analytical model in which a second-best optimal tax rate schedule on profit is characterized in the presence of the tax distortions caused by the regressive taxes. Some practical implications of the analysis are discussed.

Public Finance --- Taxation --- Efficiency --- Optimal Taxation --- Business Taxes and Subsidies --- Hydrocarbon Resources --- Taxation, Subsidies, and Revenue: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Public finance & taxation --- Progressive taxation --- Revenue administration --- Rent tax --- Average effective tax rate --- Marginal effective tax rate --- Tax policy --- Taxes --- Tax administration and procedure --- Revenue --- Income tax --- Norway

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This paper assesses a possible explanation for the global downward trend in top personal income tax rates over the last decades: globalization and the related tax evasion and avoidance opportunities could have raised elasticities of taxable income, which would imply lower optimal tax rates. The paper estimates elasticities of taxable income for top income earners using a large sample of economies and years with a common method, allowing an analysis of trends in such elasticities. The paper finds that elasticities do not appear to exhibit any clear pattern over the years. The downward trend in tax rates must have other possible explanations, which are briefly discussed.

Macroeconomics --- Personal Finance -Taxation --- Taxation --- Corporate Taxation --- Efficiency --- Optimal Taxation --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Personal Income, Wealth, and Their Distributions --- Taxation, Subsidies, and Revenue: General --- Business Taxes and Subsidies --- Public finance & taxation --- Corporate & business tax --- Personal income --- Corporate income tax --- Personal income tax --- Marginal effective tax rate --- Income tax systems --- National accounts --- Taxes --- Tax policy --- Income --- Income tax --- Corporations --- Tax administration and procedure --- United States