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The economics of taxing net wealth: A survey of the issues

  • Schnellenbach, Jan

This paper surveys possible motivations for having a net wealth tax. After giving a short overview over the state of wealth taxation in OECD countries, we discuss both popular arguments for such a tax, as well as economic arguments. It is argued that classical normative principles of taxation known from public economics cannot give a sound justification for a net wealth tax. The efficiency-related effects are also discussed and shown to be theoretically ambiguous, while empirical evidence hints at a negative effect on GDP growth. Finally, it is argued that despite of widespread and persistent lobbying for a revitalization of the net wealth tax, this is unlikely to happen due to political economy constraints.

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Paper provided by Walter Eucken Institut e.V. in its series Freiburg Discussion Papers on Constitutional Economics with number 12/5.

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Date of creation: 2012
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Handle: RePEc:zbw:aluord:125
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  12. Keith G. Banting, 1991. "The Politics of Wealth Taxes," Canadian Public Policy, University of Toronto Press, vol. 17(3), pages 351-367, September.
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  17. Vanberg, Viktor J., 2005. "Market and state: the perspective of constitutional political economy," Journal of Institutional Economics, Cambridge University Press, vol. 1(01), pages 23-49, June.
  18. James A. Yunker, 2010. "Capital wealth taxation as a potential remedy for excessive capital wealth inequality," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 33(1), pages 83-104, October.
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