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Vortrag
Soaking the Rich to Bring Down Public Debt? Revenue and Distributional Effects of a Capital Levy

Stefan Bach, Martin Beznoska, Viktor Steiner


Die Ordnung der Weltwirtschaft: Lektionen aus der Krise : Jahrestagung des Vereins für Socialpolitik 2011
Frankfurt am Main, 04.09.2011 - 07.09.2011


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Abstract:
The idea of higher wealth taxes to finance the mounting public debt in the wake of the financial crises is gaining ground in several OECD countries. We evaluate the revenue and distributional effects of a one-time capital levy on personal net wealth that is currently on the German political agenda. We use survey data from the German Socio-Economic Panel (SOEP) and estimate the net wealth distribution at the very top, based on publicly available information about very rich Germans. Since net wealth is strongly concentrated, the capital levy could raise substantial revenue, even if relatively high personal allowances are granted. We also analyze the compliance and administrative costs of the capital levy.

Abstract

The idea of higher wealth taxes to finance the mounting public debt in the wake of the financial crises is gaining ground in several OECD countries. We evaluate the revenue and distributional effects of a one-time capital levy on personal net wealth that is currently on the German political agenda. We use survey data from the German Socio-Economic Panel (SOEP) and estimate the net wealth distribution at the very top, based on publicly available information about very rich Germans. Since net wealth is strongly concentrated, the capital levy could raise substantial revenue, even if relatively high personal allowances are granted. We also analyze the compliance and administrative costs of the capital levy.

Stefan Bach

Wissenschaftlicher Mitarbeiter in der Abteilung Staat



JEL-Classification: H24;D31;H22
Keywords: Capital levy, wealth distribution, microsimulation
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