Behavioral Responses to Wealth Taxes: Evidence from Switzerland

Arbeitspapier

We study how reported wealth responds to changes in wealth tax rates. Exploiting rich intra-national variation in Switzerland, the country with the highest revenue share of annual wealth taxation in the OECD, we find that a 1 percentage point drop in the wealth tax rate raises reported wealth by at least 43% after 6 years. Administrative tax records of two cantons with quasi-randomly assigned differential tax reforms suggest that 24% of the effect arise from taxpayer mobility and 20% from house price capitalization. Savings responses appear unable to explain more than a small fraction of the remainder, suggesting sizable evasion responses in this setting with no third-party reporting of financial wealth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7908

Classification and Topics

• Classification: Wirtschaft ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes ; Fiscal Policies and Behavior of Economic Agents: Household ; State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects
• Subject: wealth taxation ; behavioral responses ; taxpayer mobility ; evasion ; Switzerland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Brülhart, Marius ; Gruber, Jonathan ; Krapf, Matthias ; Schmidheiny, Kurt
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/207299
• Last update: 10.03.2025, 11:41 AM CET