Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Taxing Our Wealth
Journal of Economic Perspectives
(pp. 207–30)
(Complimentary)
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.Citation
Scheuer, Florian, and Joel Slemrod. 2021. "Taxing Our Wealth." Journal of Economic Perspectives 35 (1): 207–30. DOI: 10.1257/jep.35.1.207Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- H21 Taxation and Subsidies: Efficiency; Optimal Taxation
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- H26 Tax Evasion and Avoidance
- H71 State and Local Taxation, Subsidies, and Revenue