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Behavioural responses to a wealth tax
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Advani, Arun and Tarrant, Hannah (2021) Behavioural responses to a wealth tax. Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (WERPS) (1368). (Unpublished)
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Official URL: https://warwick.ac.uk/fac/soc/economics/research/w...
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%.
| Item Type: | Working or Discussion Paper (Working Paper) | ||||||||||||
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| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HJ Public Finance H Social Sciences > HV Social pathology. Social and public welfare |
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| Divisions: | Faculty of Social Sciences > Economics | ||||||||||||
| Library of Congress Subject Headings (LCSH): | Wealth tax, Wealth tax -- Great Britain, Elasticity (Economics) , Tax evasion | ||||||||||||
| Series Name: | Warwick economics research papers series (WERPS) | ||||||||||||
| Publisher: | University of Warwick. Department of Economics | ||||||||||||
| Place of Publication: | Coventry | ||||||||||||
| ISSN: | 0083-7350 | ||||||||||||
| Official Date: | August 2021 | ||||||||||||
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| Number: | 1368 | ||||||||||||
| Institution: | University of Warwick | ||||||||||||
| Status: | Not Peer Reviewed | ||||||||||||
| Publication Status: | Unpublished | ||||||||||||
| Access rights to Published version: | Open Access (Creative Commons) | ||||||||||||
| Description: | This paper also appears as CAGE Discussion paper 577 |
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| Date of first compliant deposit: | 12 March 2018 | ||||||||||||
| Date of first compliant Open Access: | 12 March 2018 | ||||||||||||
| RIOXX Funder/Project Grant: |
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