Files
Document type
ArticleVersion
Published versionPublication date
Publication license
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/228354
Avoidance Responses to the Wealth Tax
Journal Title
Director/Tutor
Journal ISSN
Volume Title
Related resource
Abstract
As a consequence of the Great Recession, the Spanish government reintroduced the Wealth Tax in 2011. We exploit the variation in wealth tax exposure to analyse taxpayers’ responses to this reintroduction. While facing higher wealth taxes did not discourage savings, results indicate that a 0.1 percentage point increase in the average tax rate leads to a reduction in taxable wealth of 3.21% over 4 years. In particular, the reduction in taxable wealth comes from taking advantage of exemptions, mostly business-related. Thus, the reintroduction induced avoidance. Taxpayers also take advantage of the limit on tax liability through a change in their asset and income composition. By far, this latter source of avoidance accounts for the greatest impact on tax revenues (92.6%). The impact of these avoidance strategies on revenue collected was far from negligible, since according to our estimates they represent a 2012-2015 revenue loss of 2.75 times the 2011 estimated wealth tax revenues. These findings should be useful to policymakers and administrations considering the implementation of a wealth tax, as they illustrate the pitfalls to be circumvented.
Subject (English)
Citation
Collections
Citation
MAS MONTSERRAT, Mariona, DURÁN CABRÉ, José María and ESTELLER MORÉ, Alejandro. Avoidance Responses to the Wealth Tax. Journal of Public Economics. 2025. Vol. 246. ISSN 0047-2727. [consulted: 14 of June of 2026]. Available at: https://hdl.handle.net/2445/228354