Behavioral Responses to an Annual Wealth Tax: Evidence from Sweden

From David Seim:

This paper addresses the behavioral effects of an annual wealth tax. I use Swedish tax records over the period 2000-2006 to estimate bunching at kink points in the pro- gressive tax schedule and find significant estimates of the implied elasticity of taxable net wealth in the range [0.1,0.3]. I decompose the effects into a reporting response and a real saving response. Using asset-level data on the portfolio of each resident in Sweden, I disentangle active changes (savings) in the portfolio from passive (capital gains and losses) movements. Exploiting features of the institutional setting, I find that an increase in the tax is likely to stimulate evasion rather than deter savings.

Advertisements

About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar. http://faculty.chicagobooth.edu/owen.zidar/index.html
This entry was posted in Uncategorized and tagged , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s