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Taxing Wealth: Evidence from Switzerland

Author

Listed:
  • Marius Brülhart
  • Jonathan Gruber
  • Matthias Krapf
  • Kurt Schmidheiny

Abstract

We study the effects of wealth taxation on reported wealth. Our analysis is based on data for Switzerland, which has the highest rate of annual wealth taxation in the developed world. While the wealth tax base is defined at the federal level, tax rates vary considerably across locations and over time. We use aggregate data on wealth holdings by canton and individual-level data for the canton of Bern. Our estimated behavioral elasticities substantially exceed those of the taxable income literature. We also find that taxpayers bunch below the tax threshold, that observed responses are driven by changes in wealth holdings rather than mobility, and that financial wealth is somewhat more responsive than non-financial wealth.

Suggested Citation

  • Marius Brülhart & Jonathan Gruber & Matthias Krapf & Kurt Schmidheiny, 2016. "Taxing Wealth: Evidence from Switzerland," CESifo Working Paper Series 5966, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5966
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Dirk Schindler, 2017. "Wealth Taxation, Non-listed Firms, and the Risk of Entrepreneurial Investment," CESifo Working Paper Series 6537, CESifo Group Munich.
    2. Julio López Laborda & Fernando Rodrigo Sauco, 2017. "Movilidad de los contribuyentes de rentas altas en respuesta a las diferencias regionales en los impuestos personales," Studies on the Spanish Economy eee2017-28, FEDEA.
    3. repec:spr:sjecst:v:154:y:2018:i:1:d:10.1186_s41937-017-0012-9 is not listed on IDEAS
    4. Stefan Groot & Arjan Lejour, 2017. "Tax arbitrage incentives for mortgage prepayment behavior: Evidence from Dutch micro data," CPB Discussion Paper 350, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Spencer Bastani & Daniel Waldenström, 2018. "How Should Capital be Taxed? Theory and Evidence from Sweden," CESifo Working Paper Series 7004, CESifo Group Munich.
    6. Stefan Bach, 2016. "Erbschaftsteuer, Vermögensteuer oder Kapitaleinkommensteuer: Wie sollen hohe Vermögen stärker besteuert werden?," Discussion Papers of DIW Berlin 1619, DIW Berlin, German Institute for Economic Research.
    7. Isabel Z. Martinez & Emmanuel Saez & Michael Siegenthaler, 2018. "Intertemporal Labor Supply Substitution? Evidence from the Swiss Income Tax Holidays," NBER Working Papers 24634, National Bureau of Economic Research, Inc.
    8. repec:ntj:journl:v:70:y:2017:i:2:p:367-392 is not listed on IDEAS
    9. repec:spr:sjecst:v:153:y:2017:i:2:d:10.1007_bf03399435 is not listed on IDEAS
    10. Lawless, Martina & Lynch, Donal, 2016. "Scenarios and Distributional Implications of a Household Wealth Tax in Ireland," Papers WP549, Economic and Social Research Institute (ESRI).
    11. David Staubli, 2018. "The Elasticity of Corporate Income: Panel Data Evidence from Switzerland," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 18.01, Université de Lausanne, Faculté des HEC, DEEP.
    12. Alexander Krenek & Margit Schratzenstaller, 2018. "A European Net Wealth Tax," WIFO Working Papers 561, WIFO.
    13. repec:ses:arsjes:2017-ii-1 is not listed on IDEAS
    14. Bastani, Spencer & Waldenström, Daniel, 2018. "How Should Capital Be Taxed? Theory and Evidence from Sweden," IZA Discussion Papers 11475, Institute for the Study of Labor (IZA).
    15. Alena Bachleitner, 2017. "Abolishing the Wealth Tax. A Case Study for Germany," WIFO Working Papers 545, WIFO.
    16. Katrine Jakobsen & Kristian Jakobsen & Henrik Kleven & Gabriel Zucman, 2018. "Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark," NBER Working Papers 24371, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    wealth taxation; behavioral responses; Switzerland;

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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