A EUROPEAN NET WEALTH TAX

Krenek, Schratzenstaller

GNI

VATTOR

EU-BUDGET

Competitiveness & Infrastructure

Cohesion

CAP

TOR

EU-BUDGETEU TAX

Competitiveness & Infrastructure

Cohesion

?

Green Taxes / Tariffs

Taxes on Wealth

...can not be enforcedon a national level effectively.

• Cross Border Externalities

• Mobile Tax Bases

• Tax Competition

EU

Tax Swap

NationalGreen Tax / Tariff Taxes on Labour

Taxes on WealthContributions

To social security

A EUROPEAN NET WEALTH TAX

Net Wealth Taxes abolished in:

• Ireland 1978• Austria 1994• Italy 1995• Denmark 1997• Germany 1997• The Netherlands 2001• Finland 2006• Luxembourg 2006• Iceland 2006• Sweden 2007

Why taxing wealth again?

Wealth inequality Valuation difficulties

“Ability-to-pay-principle“

Equality of opportunity

Top of growth-friendly hierarchy

High costs of tax collection

Issues of double taxation

Tax avoidance / wealth migration

Why taxing wealth again?

Wealth inequality Valuation difficulties

“Ability-to-pay-principle“

Equality of opportunity

Top of growth-friendly hierarchy

High costs of tax collection

Issues of double taxation

Tax avoidance / wealth migration

EU-Integration at a crossroads

Empirics

Household finance & consumption surveyTwo shortcomings:

Two weeks ago...

Kapeller et al. estimated thewealth distribution of Austria

Top 1% 40,5% HH wealth

What we did...

• Adjusting FA & LIAB to national balance sheets

• Observations from FORBES

• Estimating 𝜶𝜶 of Parameter pareto tail

• Estimating lower bound of pareto tail

• Artificial HH

Back of an envelope:

• Applying most extreme tax base elasticities

• Taxing HH wealth above 1Mio. € with 1%

• Taxing HH wealth above 5Mio. € with 1,5%

Tax revenue = 156 Billion €

Annual EU-Budget = 145 Billion €

Thank You