What Switzerland can teach us on the pros and cons of wealth taxes

Jan 2, 2020

Wealth taxes are in vogue, but recent studies have produced widely differing estimates of the elasticity of the wealth tax base Image: Unsplash/Eric Muhr

Marius Brülhart

Professor of Economics, University of Lausanne

Matthias Krapf

Postdoctoral researcher, University of Lausanne

Kurt Schmidheiny

Professor of Applied Econometrics, University of Basel

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Table 1 Estimates of the semi-elasticity of reported wealth relative to a 1 percentage-point increase in the wealth tax Image: VoxEU

Figure 1 Cumulative response of taxable wealth to a decrease in the wealth tax. Distributed-lag cumulative effects estimated through a first-differences panel model on canton-year data. Effects can be interpreted as the percentage response of aggregate taxable wealth to a 1 percentage point reduction in the canton wealth tax rate.

Figure 1 Cumulative response of taxable wealth to a decrease in the wealth tax Image: Brülhart et al. (2019).

Figure 2 Cumulative response of taxable wealth to a decrease in the wealth tax. The graph shows cumulative differential changes in wealth of Lucerne relative to Bern, scaled to differential wealth in 2008. It also shows the contributions to the total effect by net intra-national and international taxpayer moves, in the year of moving.

Figure 2 Cumulative response of taxable wealth to a decrease in the wealth tax Image: Brülhart et al. (2019)

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