Behavioural responses to a wealth tax

Arun Advani and Hannah Tarrant
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Hannah Tarrant: London School of Economics III

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: In this paper, we review the existing empirical evidence on how individuals respond to the incentives created by a net wealth tax. Variation in the overall magnitude of behavioural responses is substantial: estimates of the elasticity of taxable wealth vary by a factor of 800. We explore three key reasons for this variation: tax design, context, and methodology. We then discuss what is known about the importance of individual margins of response and how these interact with policy choices. Finally, we use our analysis to systematically narrow down and reconcile the range of elasticity estimates. We argue that a well-designed wealth tax would reduce the tax base by 7-17% if levied at a tax rate of 1%.

Date: 2021
New Economics Papers: this item is included in nep-cwa, nep-isf, nep-pbe and nep-pub
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Citations: View citations in EconPapers (30)

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https://warwick.ac.uk/fac/soc/economics/research/w ... rp_1368_-_advani.pdf

Related works:
Journal Article: Behavioural responses to a wealth tax (2021)
Working Paper: Behavioural responses to a wealth tax (2021)
Working Paper: Behavioural responses to a wealth tax (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1368

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