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The Distributive Effects of Wealth Taxes

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  • James B. Davies

Abstract

The likely distributive effects of imposing annual net worth taxes or capital transfer taxes in Canada are analyzed. The conceptual basis of such an exercise is discussed. Calculations of possible short-run impacts of an annual wealth tax on income and wealth distribution are then performed. These show a moderate equalizing effect in the upper tail for income, but a small initial effect for wealth distribution. Careful design is required to avoid a regressive effect in the lower tail. A shift in tax burdens towards the old is found under all variants of wealth tax studied. The paper concludes by discussing long-run effects, not captured in the calculations.

Suggested Citation

  • James B. Davies, 1991. "The Distributive Effects of Wealth Taxes," Canadian Public Policy, University of Toronto Press, vol. 17(3), pages 279-308, September.
    • Handle: RePEc:cpp:issued:v:17:y:1991:i:3:p:279-308
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    References listed on IDEAS

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    1. Davies, J B, 1979. "On the Size Distribution of Wealth in Canada," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(3), pages 237-259, September.
    2. J. B. Davies, 1979. "On The Size Distribution Of Wealth In Canada," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(3), pages 237-259, September.
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    Cited by:

    1. Rainer Niemann & Caren Sureth-Sloane, 2016. "Does Capital Tax Uncertainty Delay Irreversible Risky Investment?," CESifo Working Paper Series 6046, CESifo.
    2. Niemann, Rainer & Sureth, Caren, 2016. "Does capital tax uncertainty delay irreversible risky investment?," arqus Discussion Papers in Quantitative Tax Research 209, arqus - Arbeitskreis Quantitative Steuerlehre.

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