Revenue and distributional modelling for a UK wealth tax

Arun Advani, Helen Hughson and Hannah Tarrant

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: In this paper, we model the revenue that could be raised from an annual and a one-off wealth tax of the design recommended by Advani, Chamberlain and Summers in the Wealth Tax Commission's Final Report (2020). We examine the distributional effects of the tax, in terms of both wealth and other characteristics. We also estimate the share of taxpayers who would face liquidity constraints in meeting their tax liability. We find that an annual wealth tax charging 0.17 per cent on wealth above £500,000 could generate £10 billion in revenue, before administrative costs. Alternatively, a one-off tax charging 4.8 per cent (effectively 0.95 per cent per year, paid over a five-year period) on wealth above the same threshold, would generate £250 billion in revenue. To put our revenue estimates into context, we present revenue estimates and costings for some commonly proposed reforms to the existing set of taxes on capital.

Keywords: distribution; personal tax; revenue; wealth tax; ES/L011719/1; ES/V012657/1; International Inequalities Institute AFSEE COVID‐19 fund (search for similar items in EconPapers)
JEL-codes: D31 H24 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2021-10-25
New Economics Papers: this item is included in nep-acc and nep-pbe
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Citations: View citations in EconPapers (9)

Published in Fiscal Studies, 25, October, 2021, 42(3-4), pp. 699 - 736. ISSN: 0143-5671

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http://eprints.lse.ac.uk/112699/ Open access version. (application/pdf)

Related works:
Journal Article: Revenue and distributional modelling for a UK wealth tax (2021)
Working Paper: Revenue and distributional modelling for a UK wealth tax (2021)
Working Paper: Revenue and distributional modelling for a UK wealth tax (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:112699

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