Behavioral Responses to Wealth Taxes: Evidence from Switzerland

Brülhart, Marius, Jonathan Gruber, Matthias Krapf and Kurt Schmidheiny
Authors registered in the RePEc Author Service: Marius Brülhart

No 14054, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study how reported wealth responds to changes in wealth tax rates. Exploiting rich intra-national variation in Switzerland, the country with the highest revenue share of annual wealth taxation in the OECD, we find that a 1 percentage point drop in the wealth tax rate raises reported wealth by at least 43% after 6 years. Administrative tax records of two cantons with quasi-randomly assigned differential tax reforms suggest that 24% of the effect arise from taxpayer mobility and 20% from house price capitalization. Savings responses appear unable to explain more than a small fraction of the remainder, suggesting sizable evasion responses in this setting with no third-party reporting of financial wealth.

Keywords: Wealth taxation; Behavioral responses; Taxpayer mobility; Tax evasion; Switzerland (search for similar items in EconPapers)
JEL-codes: H24 H31 H73 (search for similar items in EconPapers)
Date: 2019-10
New Economics Papers: this item is included in nep-iue, nep-pbe and nep-pub
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Citations: View citations in EconPapers (33)

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Related works:
Journal Article: Behavioral Responses to Wealth Taxes: Evidence from Switzerland (2022)
Working Paper: Behavioral Responses to Wealth Taxes: Evidence from Switzerland (2019)
Working Paper: Taxing Wealth: Evidence from Switzerland (2016)
Working Paper: Taxing Wealth: Evidence from Switzerland (2016)
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