The Role and Design of Net Wealth Taxes in the OECD

OECD

• Publisher: OECD
• Year: 2018
• Topic: Social Sciences
• eBook ISBN:
  9789264299337
• Subtopic: Sociology
• Index: Social Sciences

Chapter 1. Overview of individual net wealth taxes in OECD countries

This chapter provides an overview of individual net wealth taxes in OECD countries. It looks at how the number of countries levying a net wealth tax has evolved over time. It also examines trends in the revenues that have been collected from net wealth taxes since the mid-1960s.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

This chapter is based on the tax rules that were in place as of 1 September 2017. Since then, France has replaced its net wealth tax (“impôt de solidarité sur la fortune”) with a new real estate wealth tax (“impôt sur la fortune immobilière”), with effect from 1 January 2018.

This chapter provides an overview of net wealth taxes paid by individuals in OECD countries. It examines the declining prevalence of net wealth taxes in OECD countries and looks at how wealth tax revenues have evolved over time. Generally, this chapter shows that net wealth taxes are far less popular than they used to be – with only four OECD countries levying such taxes in 2017. Concerns about their efficiency and administrative costs, in particular in comparison to the limited revenues they tend to generate, have led to their repeal in many countries. More recently, however, trends in income and wealth inequality, combined with the need to balance public budgets, have led to a renewed interest in wealth taxes.

Very few OECD countries still have net wealth taxes

Net wealth taxes are recurrent taxes on individual net wealth stocks. They include national and subnational recurrent taxes on a wide range of movable and immovable property, net of debt. They are distinct from other taxes on capital, including taxes on capital income and taxes on wealth transfers. They can also be distinguished from other taxes on wealth stocks: compared to recurrent taxes on immovable property, they are taxes on a broad range of property and debts are deductible; and unlike sporadic capital levies, net wealth taxes are levied on a regular basis (usually annually).

The number of OECD countries levying individual net wealth taxes dropped from 12 in 1990 to 4 in...

Table of contents

• Title page
• Legal and rights
• Foreword
• Acknowledgments
• Executive summary
• Chapter 1. Overview of individual net wealth taxes in OECD countries
• Chapter 2. Trends in the distribution of income and wealth
• Chapter 3. The case for and against individual net wealth taxes
• Chapter 4. Net wealth tax design issues
• Chapter 5. Conclusions and policy implications
• Annex A. OECD questionnaire on current and historical net wealth taxes
• About the OECD