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Concept
Wealth tax
Summary
A wealth tax (also called a capital tax or equity tax) is a tax on an entity's holdings of assets or an entity's net worth. This includes the total value of personal assets, including cash, bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses, financial securities, and personal trusts (a one-off levy on wealth is a capital levy). Typically, wealth taxation often involves the exclusion of an individual's liabilities, such as mortgages and other debts, from their total assets. Accordingly, this type of taxation is frequently denoted as a net wealth tax.
five of the 36 OECD countries had a personal wealth tax (down from 12 in 1990).
Proponents note that it can reduce income inequality by reducing the accumulation of large amounts of wealth by individuals. Critics note that a wealth tax can cause wealthy entrepreneurs and businesspeople to leave the country and move their wealth to a more tax friendly nation.
The Global Revenue Statistics Database presents a roster of countries that have documented instances of revenue collected from wealth taxes (the data is limited to 1965-2021). A total of eight countries (Austria, Denmark, Finland, Germany, Netherlands, Norway, Sweden and Switzerland) were known to have collected revenue through wealth tax in 1965. In the ensuing decades, the number of countries reporting wealth tax revenue increased gradually and reached its peak in 1995, with 12 countries (Austria, Denmark, Finland, France, Germany, Iceland, Italy, Netherlands, Norway, Spain, Sweden and Switzerland) reporting revenue generated from this form of taxation.
Although, as of 2021, only five of the 36 OECD countries continue to implement the wealth tax on individuals.
The five countries are Colombia, France, Norway, Spain and Switzerland.
require declaration of the taxpayer's balance sheet (assets and liabilities), and from that ask for a tax on net worth (assets minus liabilities), as a percentage of the net worth, or a percentage of the net worth exceeding a certain level.
Official source
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