Employment Structure and the Rise of the Modern Tax System

This paper builds a new microdatabase that covers 100 countries at all income levels and long-run time series in the United States (1870–2010) Mexico ( 1960–2010) to document how modern tax system arises over development. I establish set of stylized facts, which show exemption threshold decreases distribution as country develops, tracking growth employee share employment occurs gradually further down distribution. Additional evidence supports interpretation rise third-party covered through increases drives expansions base (JEL D31, H23, H24, H71, J22, J23, N40)