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A Quantitative Assessment of the Net Wealth Tax: The Spanish Experience
[Income and Wealth Concentration in Spain from a Historical and Fiscal Perspective]

Author

Listed:
  • José M Durán-Cabré
  • Alejandro Esteller Moré

Abstract

There is growing debate, both social and academic, about the possibility of levying an annual net wealth tax. Until a few years ago, such a proposal appeared difficult to both implement and control, but recent technological innovations, which could greatly facilitate the periodic valuation of wealth, combined with improvements in international tax information sharing could make a “modern wealth tax” possible. Nonetheless, a number of challenges regarding its design still need to be addressed. Taking advantage of the Spanish experience—the only EU country to levy a wealth tax—we undertake a quantitative analysis of various key legal elements of the current tax (exemptions and the common income and wealth tax ceiling) by means of a tax simulator we have developed; we also analyze its redistributive power. Our results show that the family business exemption and the common ceilings are highly regressive. We also assess the effectiveness of alternative reforms with more comprehensive tax bases (JEL codes: H24, H23, and D31).

Suggested Citation

  • José M Durán-Cabré & Alejandro Esteller Moré, 2021. "A Quantitative Assessment of the Net Wealth Tax: The Spanish Experience [Income and Wealth Concentration in Spain from a Historical and Fiscal Perspective]," CESifo Economic Studies, CESifo Group, vol. 67(4), pages 488-510.
    • Handle: RePEc:oup:cesifo:v:67:y:2021:i:4:p:488-510.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifab004
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    Cited by:

    1. Jakurti, Edison & Süssmuth, Bernd, 2023. "Behavioral responses to wealth taxes: Evidence from the Spanish Survey of Household Finances," Economics Letters, Elsevier, vol. 223(C).

    More about this item

    Keywords

    wealth tax; wealth distribution; redistribution; tax simulator; tax reform;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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