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Cover of: An Annual Wealth Tax: Pros and Cons
Pierre Pestieau, Robin Boadway

An Annual Wealth Tax: Pros and Cons

Section: Articles
Volume 77 (2021) / Issue 4, pp. 408-429 (22)
Published 20.12.2021
DOI 10.1628/fa-2021-0019
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  • 10.1628/fa-2021-0019
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Summary
We explore the case for a wealth tax as part of the tax mix. Annual wealth taxes are roughly equivalent to capital income taxes on the assets to which they apply. Wealth taxes differ in purpose from inheritance taxes which are useful adjuncts to income taxes. We recount the arguments for taxing capital income, and for taxing inheritances regardless of whether capital income is taxed. We argue that if the desire to tax asset income and wealth transfers is appropriately addressed by capital income and inheritance taxation, the additional need for an annual wealth tax is minimal.