Tax Design, Information, and Elasticities: Evidence From the French Wealth Tax

Bertrand Garbinti, Jonathan Goupille-Lebret, Mathilde Muñoz, Stefanie Stantcheva and Gabriel Zucman

No 31333, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using exhaustive administrative wealth and income tax data, we study a French wealth tax reform that scaled back information disclosure requirements below a certain wealth threshold. We develop a dynamic bunching approach that permits estimating the average response to the reform, the share of compliers (bunchers) and the LATE. Reported wealth declines sharply in response to the reform and annual wealth growth rates are on average 20% lower among affected taxpayers. This decline appears due to increased evasion facilitated by the lower disclosure requirements. By contrast, the elasticities to tax rates estimated are very small and insignificant. Responses to disclosure requirements are ten times larger than behavioral responses to kinks in the tax rates. To offset the revenue losses induced by the simplified reporting regime, the government would need to increase the effective wealth tax rate paid by the bunchers by 22.5%. Together, these results illustrate the critical role of information disclosure policies in shaping taxpayers’ behavior and tax revenues.

JEL-codes: H26 H31 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-eec, nep-iue, nep-pbe and nep-pub
Note: PE
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Tax Design, Information, and Elasticities: Evidence From the French Wealth Tax (2025)
Working Paper: Tax Design, Information, and Elasticities: Evidence From the French Wealth Tax (2024)
Working Paper: Tax Design, Information, and Elasticities: Evidence From the French Wealth Tax (2024)
Working Paper: Tax Design, Information, and Elasticities: Evidence From the French Wealth Tax (2023)
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