Distributional Effects of the Wealth Tax under a Lifetime-Dynastic Income Concept
Elin Halvorsen and
No 6614, CESifo Working Paper Series from CESifo
Recent books by Thomas Piketty (Piketty, 2014) and Anthony Atkinson (Atkinson, 2015) have brought the annual wealth tax back on the policy agenda. Both authors suggest using the annual wealth tax to supplement the redistributional effects of the income tax, assigning it a role as a redistributional backstop mechanism. However, when measured against annual income, the wealth tax is often not delivering the expected effects – a large share of the tax burden falls on people with low income. We argue that instead of using yearly income, one should measure wealth tax burdens with respect to individual lifetime income in family dynasties. Using rich Norwegian administrative data, we describe how a lifetime-dynastic income concept can be established. Under our preferred income concept, the wealth tax shows advantageous distributional effects – it represents a clear redistributional supplement to the income tax and is overall progressive in income.
Keywords: wealth tax; redistribution; life-cycle income; dynastic income (search for similar items in EconPapers)
JEL-codes: D31 H24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
Journal Article: Distributional Effects of a Wealth Tax under Lifetime‐Dynastic Income Concepts (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6614
Access Statistics for this paper
More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().