A Wealth Tax on the Rich to Bring down Public Debt?: Revenue and Distributional Effects of a Capital Levy
AbstractThe idea of higher wealth taxes to finance the mounting public debt in the wake of the financial crises is gaining ground in several OECD countries. We evaluate the revenue and distributional effects of a one-time capital levy on personal net wealth that is currently on the German political agenda. We use survey data from the German Socio-Economic Panel (SOEP) and estimate the net wealth distribution at the very top, based on publicly available information about very rich Germans. Since net wealth is strongly concentrated, the capital levy could raise substantial revenue, even if relatively high personal allowances are granted. We also analyze the compliance and administrative costs of the capital levy.
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Bibliographic InfoPaper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 397.
Length: 22 p.
Date of creation: 2011
Date of revision:
Capital levy; wealth distribution; microsimulation;
Other versions of this item:
- Stefan Bach & Martin Beznoska & Viktor Steiner, 2011. "A Wealth Tax on the Rich to Bring down Public Debt?: Revenue and Distributional Effects of a Capital Levy," Discussion Papers of DIW Berlin 1137, DIW Berlin, German Institute for Economic Research.
- Bach, Stefan & Beznoska, Martin & Steiner, Viktor, 2011. "A wealth tax on the rich to bring down public debt? Revenue and distributional effects of a capital levy," Discussion Papers 2011/10, Free University Berlin, School of Business & Economics.
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-16 (All new papers)
- NEP-PBE-2011-09-16 (Public Economics)
- NEP-PKE-2011-09-16 (Post Keynesian Economics)
- NEP-PUB-2011-09-16 (Public Finance)
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