Behavioral Responses to Wealth Taxes: Evidence from Switzerland

Marius Brülhart, Jonathan Gruber, Matthias Krapf and Kurt Schmidheiny

American Economic Journal: Economic Policy, 2022, vol. 14, issue 4, 111-50

Abstract: We study how declared wealth responds to changes in wealth tax rates. Exploiting rich intranational variation in Switzerland, we find a 1 percentage point drop in a canton's wealth tax rate raises reported taxable wealth by at least 43 percent after 6 years. Administrative tax records of two cantons with quasi-randomly assigned differential tax reforms suggest that 24 percent of the effect arises from taxpayer mobility and 21 percent from a concurrent rise in housing prices. 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.

JEL-codes: D91 H24 H26 H31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (41)

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Related works:
Working Paper: Behavioral Responses to Wealth Taxes: Evidence from Switzerland (2019)
Working Paper: Behavioral Responses to Wealth Taxes: Evidence from Switzerland (2019)
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DOI: 10.1257/pol.20200258

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