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Behavioral Responses to Special Tax Regimes for the Super-Rich: Insights from Swiss Rich Lists

Author

Listed:
  • Enea Baselgia

    (University of St.Gallen and SIAW Institute)

  • Isabel Z. Martínez

    (ETH Zurich and KOF Swiss Economic Institute)

Abstract

We collect, digitize, and supplement Swiss rich lists published in the “BILANZ†business magazine since 1989, to gain new insights on the structure and dynamics of top wealth in Switzerland. We show that 60% of the super-rich are heirs—a fraction twice as large as in the US, where many super-rich are self-made—and that half of the super-rich residing in Switzerland are foreign-born. Based on this new dataset, we estimate the sensitivity of the location choice of super-rich foreigners to a preferential tax scheme, under which wealthy foreigners are taxed on their expenses, rather than their true income and wealth. We are the first to evaluate this infamous policy (which bears similarities with “non-dom†taxation in the UK or Italy), and show that when some Swiss cantons abolished this practice, their stock of super-rich foreigners dropped by 30% as a consequence. We find no response for the unaffected Swiss super-rich.

Suggested Citation

  • Enea Baselgia & Isabel Z. Martínez, 2023. "Behavioral Responses to Special Tax Regimes for the Super-Rich: Insights from Swiss Rich Lists," Working Papers 012, EU Tax Observatory.
    • Handle: RePEc:dbp:wpaper:012
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    References listed on IDEAS

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    1. Bertrand Garbinti & Jonathan Goupille-Lebret & Thomas Piketty, 2021. "Accounting for Wealth-Inequality Dynamics: Methods, Estimates, and Simulations for France," Journal of the European Economic Association, European Economic Association, vol. 19(1), pages 620-663.
    2. Henrik Jacobsen Kleven & Camille Landais & Esben Schultz, 2014. "Migration and Wage Effects of Taxing Top Earners: Evidence from the Foreigners' Tax Scheme in Denmark," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 333-378.
    3. Auten, Gerald & Gee, Geoffrey, 2009. "Income Mobility in the United States: New Evidence From Income Tax Data," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(2), pages 301-328, June.
    4. Anthony Atkinson & Thomas Piketty, 2007. "Top incomes over the twentieth century: A contrast between continental european and english-speaking countries," Post-Print halshs-00754859, HAL.
    5. Atkinson, A. B. & Piketty, Thomas (ed.), 2007. "Top Incomes Over the Twentieth Century: A Contrast Between Continental European and English-Speaking Countries," OUP Catalogue, Oxford University Press, number 9780199286881, Decembrie.
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    Cited by:

    1. Enea Baselgia, 2023. "The Compliance Effects of the Automatic Exchange of Information: Evidence from the Swiss Tax Amnesty," Working Papers 019, EU Tax Observatory.

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    More about this item

    Keywords

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    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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