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Sustainability-oriented Future EU Funding: A European Net Wealth Tax
Austrian Institute of Economic Research (WIFO). (FairTax)
Austrian Institute of Economic Research (WIFO). (FairTax)
2017 (English)Report (Refereed)
Abstract [en]

The increase of wealth inequality in many EU countries has spurred interest in wealth taxation. While taxes on wealth for a long time have played only a marginal role in the public finance and taxation literature, in the more recent literature a variety of arguments are brought forward in favour of (higher) wealth taxation. Most of these arguments directly or indirectly refer to the potential of wealth taxes to contribute to various dimensions of sustainability, in particular to economic, social, and/or institutional/cultural sustainability. Tax competition has led to an almost complete disappearance of recurrent taxes on personal or corporate net wealth in Europe. EU-wide implementation of a net wealth tax based on harmonised tax provisions may serve as a first step in a longer-term oriented move of the stepwise expansion of net wealth taxes on a global scale. By dealing with non- and under-reporting in the Household and Consumption Survey (HFCS) data set provided by the European Central Bank, we are able to estimate the wealth distribution within 20 EU Member States. Applying a progressive household-based tax schedule with a tax rate of 1% for net wealth above € 1 million and 1.5% for net wealth above € 5 million on these adjusted wealth distributions yields potential tax revenues of € 156 billion, taking into account the behavioural responses of individuals triggered by net wealth taxation. Given the positive sustainability properties of a net wealth tax with regard to economic efficiency and social inclusion, a European net wealth tax offers itself as an interesting candidate for sustainability-oriented tax-based own resources to finance the EU budget.

Place, publisher, year, edition, pages
Umeå: Umeå universitet , 2017. , 44 p.
Series
FairTax: Working Paper Series, 10
Keyword [en]
Net wealth tax, EU taxes, tax-based own resources, EU system of own resources, sustainability-oriented taxation, HFCS
National Category
Law and Society
Research subject
Economics
Identifiers
URN: urn:nbn:se:umu:diva-136582OAI: oai:DiVA.org:umu-136582DiVA: diva2:1112261
Funder
EU, Horizon 2020, 649439
Available from: 2017-06-20 Created: 2017-06-20 Last updated: 2017-06-22

Open Access in DiVA

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf