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Wealth Taxation and Sustainable Development: Could Wealth Related Taxes Play a Role in Achieving the SDGs?

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  • Levent Eraydın
  • Cemil Faruk Durmaz

Abstract

This paper examines the relationship between wealth taxation and Sustainable Development Goals (SDGs) in OECD member countries and analyzes the impacts of wealth (related) taxes on social, environmental, and economic goals for the period of 2000–2021. The results from panel data estimations utilizing fixed effects and Driscoll‐Kraay standard errors indicate that wealth taxes positively contribute to social goals (such as reducing inequalities) but negatively affect economic goals. In the data, we observe that wealth taxes are as successful as corporate income taxes in generating the necessary finance for governments. This underscores that wealth taxes hold significant revenue potential in tackling real‐world problems such as climate change. However, our empirical results do not show any meaningful impact of wealth taxes on environmental objectives. With their current forms, wealth taxes lead to opposing effects on SDGs in OECD countries. Developing effective implementation strategies for wealth taxes is, therefore, essential for promoting future economic activities toward environmental sustainability and well‐being.

Suggested Citation

  • Levent Eraydın & Cemil Faruk Durmaz, 2025. "Wealth Taxation and Sustainable Development: Could Wealth Related Taxes Play a Role in Achieving the SDGs?," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(6), pages 8638-8647, December.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:6:p:8638-8647
    DOI: 10.1002/sd.70123
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