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The end of bank secrecy: implications for redistribution and optimal taxation

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  • Niels Johannesen

Abstract

This paper argues that the ability to enforce taxes on offshore income may shape the redistributional properties of the tax system through two channels. First, it mechanically raises tax progressivity for given parameters of the tax system because high-income taxpayers own most of the offshore wealth. In the US, recent comprehensive reporting by offshore banks suggests the mechanical increase in average tax rates may be around 1.5 percentage points for the top 0.01 per cent and virtually zero below the top 1 per cent. Second, it may further raise tax progressivity by changing the trade-offs underlying optimal taxation in favour of higher taxation of top incomes.

Suggested Citation

  • Niels Johannesen, 2023. "The end of bank secrecy: implications for redistribution and optimal taxation," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 39(3), pages 565-574.
    • Handle: RePEc:oup:oxford:v:39:y:2023:i:3:p:565-574.
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    File URL: http://hdl.handle.net/10.1093/oxrep/grad024
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    Cited by:

    1. İrem Güçeri & Joel Slemrod, 2023. "Taxing the rich (more)," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 39(3), pages 399-405.

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