Does A Progressive Wealth Tax Reduce Top Wealth Inequality? Evidence From Switzerland

Samira Marti, Isabel Martínez () and Florian Scheuer
Additional contact information
Samira Marti: University of Zurich
Isabel Martínez: ETH Zurich
Florian Scheuer: University of Zurich

No 13, Working Papers from EU Tax Observatory

Abstract: Like in many other countries, wealth inequality has increased in Switzerland over the last fifty years. By providing new evidence on cantonal top wealth shares for each of the 26 cantons since 1969, we show that the overall trend masks striking differences across cantons, both in levels and trends. Combining this with variation in cantonal wealth taxes, we then estimate an event study model to identify the dynamic effects of reforms to top wealth tax rates on the subsequent evolution of wealth concentration. Our results imply that a reduction in the top marginal wealth tax rate by 0.1 percentage points increases the top 1% (0.1%) wealth share by 0.9 (1.2) percentage points five years after the reform. This suggests that wealth tax cuts over the last 50 years explain roughly 18% (25%) of the increase in wealth concentration among the top 1% (0.1%).

Keywords: Wealth Inequality; Wealth Taxation; Top Wealth Shares; Cantonal Tax Policy; Switzerland; Event Study Analysis (search for similar items in EconPapers)
JEL-codes: D31 H24 H71 N34 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2023-03
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.taxobservatory.eu//www-site/uploads/20 ... ealth-Tax_202303.pdf Full working paper (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dbp:wpaper:013

Access Statistics for this paper

More papers in Working Papers from EU Tax Observatory Contact information at EDIRC.
Bibliographic data for series maintained by Inga Chilashvili ().