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  4. November 2017
  5. Behavioral Responses to Wealth Taxes: Evidence from Sweden

American Economic Journal:
Economic Policy

ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)

Behavioral Responses to Wealth Taxes: Evidence from Sweden

  • David Seim
American Economic Journal: Economic Policy
vol. 9, no. 4, November 2017
(pp. 395–421)
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Abstract

This paper provides an empirical assessment of an annual wealth tax. Using Swedish administrative data, I estimate net-of-tax-rate elasticities of taxable wealth in the range [0.09, 0.27]. Cross-checking self-reported assets against asset data unavailable to the tax agency reveals that around a third of the elasticity estimates are due to underreporting of asset values. Difference-in-difference designs further suggest that the responses reflect evasion and avoidance rather than changes in saving.

Citation

Seim, David. 2017. "Behavioral Responses to Wealth Taxes: Evidence from Sweden." American Economic Journal: Economic Policy, 9 (4): 395–421. DOI: 10.1257/pol.20150290

Additional Materials

JEL Classification

  • H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
  • H26 Tax Evasion and Avoidance
  • H31 Fiscal Policies and Behavior of Economic Agents: Household
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