Working Paper: NBER ID: w28150
Authors: Florian Scheuer; Joel Slemrod
Abstract: This paper evaluates proposals for an annual wealth tax. While a dozen OECD countries levied wealth taxes in the recent past, now only three retain them, with only Switzerland raising a comparable fraction of revenue as recent proposals for a US wealth tax. Studies of these taxes sometimes, but not always, find a substantial behavioral response, including of saving, portfolio change, avoidance, and evasion, and the impact depends crucially on design features, especially the broadness of the base and enforcement provisions. Because the US proposals are very different from any previous wealth tax, experience in other countries offers only broad lessons, but we can gain insights from closely related taxes, such as the property and the estate tax, and from optimal tax analysis of the role of wealth taxation.
Keywords: wealth tax; inequality; OECD; behavioral response; tax design
JEL Codes: H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| implementation of a wealth tax (H24) | behavioral effects on households (D10) |
| design features of the tax (H20) | behavioral effects on households (D10) |
| broader the base and stricter the enforcement (P37) | less likely households are to evade taxes (H31) |
| wealth tax (H24) | reduction in reported wealth (E21) |
| wealth tax (H24) | shift towards less easily valued assets (G19) |