Tax Policy Studies the Role and Design of Net Wealth Taxes in the OECD
by OECD (Author)

About the Author
The OECD is an international organization that consists of 30 Member countries from the developed world that accept the principles of representative democracy and free market economy. It originated in 1948 as the Organization for European Economic Cooperation (OEEC) to help administer the Marshall Plan for the reconstruction of Europe after World War II. Later its membership was extended to non-European states, and in 1961 it was reformed into the OECD. The organization provides a forum where governments can compare policy experiences, seek answers to common problems, identify good practice and co-ordinate domestic and international policies. With active relationships with some 70 other countries and economies, NGOs and civil society, the organization has a global reach. Renowned for its publications and statistics, its work covers economic and social issues from macroeconomics, to trade, education, environment, development and science and innovation.

About this book
This book examines and assesses the current and historical use of net wealth taxes, defined as recurrent taxes on individual net assets, in OECD countries. It provides background on the use of wealth taxes over time in OECD countries as well as on trends in income and wealth inequality. It then assesses the case for and against the use of a net wealth tax to raise revenues and reduce inequality, based on efficiency, equity and tax administration considerations. The effects of personal capital income taxes and taxes on wealth transfers are also discussed to understand how these taxes interact with net wealth taxes. Finally, the book looks at practical tax design issues and shows that the way a net wealth tax is designed can have a significant impact on the effectiveness and fairness of the tax. The book concludes with a number of practical tax policy recommendations regarding net wealth taxes.
This book complements recent OECD work on the taxation of household savings and, more broadly, on tax design for inclusive growth. The book also paves the way for future work focusing, among other areas, on the design of inheritance and capital gains taxes, as well as on the potential use of wealth-testing for broader tax and benefit purposes.

Table of contents
Executive summary
Chapter 1. Overview of individual net wealth taxes in OECD countries
    Very few OECD countries still have net wealth taxes
    Revenues from wealth taxes have typically been very low
    Over time, wealth tax revenues have generally not increased despite significant wealth growth
    Other taxes on property play a bigger role than wealth taxes in OECD tax systems but overall property tax revenues remain limited
    References
Chapter 2. Trends in the distribution of income and wealth
    Income inequality has increased in the last 30 years
    Wealth is more concentrated than income
    The composition of wealth varies with taxpayers’ levels of wealth
    Wealth holdings generally follow a lifecycle pattern
    Notes
    References
Chapter 3. The case for and against individual net wealth taxes
    Characteristics of net wealth taxes
    Comparing net wealth tax with personal capital income taxes
    Interaction between capital income tax rates and the net wealth tax base
    Comparing net wealth taxes with other taxes on personal property
    The case for net wealth taxes
    The case against net wealth taxes
    Summary and policy implications
    Notes
    References
Chapter 4. Net wealth tax design issues
    Government level
    Tax unit
    Tax exemption thresholds
    Taxed assets, exemptions and reliefs
    Debt deductibility
    Valuation rules
    Tax rates
    Caps on total tax liability
    Tax filing and payment procedures
    Anti-avoidance/evasion rules
    Political economy considerations
    Notes
    References
Chapter 5. Conclusions and policy implications
Annex A. OECD questionnaire on current and historical net wealth taxes

Series: OECD tax policy studies (Book 26)
Length: 112 pages
Publisher: Org. for Economic Cooperation & Development (May 11, 2018)
Language: English
ISBN-10: 9789264290297
ISBN-13: 978-9264290297