Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207299 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7908
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
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.
Subjects: 
wealth taxation
behavioral responses
taxpayer mobility
evasion
Switzerland
JEL: 
H24
H31
H73
Document Type: 
Working Paper
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