User:KyleMGrace/Wealth tax
Editing the lead:
A wealth tax (also called a capital tax or equity tax) is a tax on an entity's holdings of assets. 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 (an on-off levy on wealth is a capital levy).[1] Typically, liabilities (primarily mortgages and other loans) are deducted from an individual's wealth, hence it is sometimes called a net wealth tax. This is in contrast to other tax plans such as an income tax, which is in use by countries like the United States. Wealth taxation plans are in use in many countries around the world and seek to reduce the accumulation of wealth by individuals. [1]
Revenue
[edit]Revenue from a wealth tax scheme depends largely on the presence of net wealth and wealth inequality within the target country. Revenue depends on the plan that is in place, but it generally can be modeled as , where t represents the tax rate and w is the amount of wealth affected by that tax rate.[2] Many plans include tax brackets, where a certain portion of the individual's wealth will be taxed at a given rate and any wealth beyond that amount will be taxed at a different rate.
A small number of countries have been using wealth tax regimes for some time. Revenues earned from wealth tax schemes vary by country from 0.98% of GDP in Switzerland to 0.22% in France, for example.[3] 2020 United States presidential candidate Elizabeth Warren claimed a wealth tax plan could generate 1.4% of GDP in revenue for the United States.
According to data from the Organisation for Economic Co-operation and Development (OECD), the revenues generated from wealth taxes account for about 0.46% of all tax revenue on average in 2018 for companies which have wealth tax schemes in place. However this varies from country to country, the highest would be that of Luxembourg where it accounted for 7.18% of total tax revenue in 2018, the lowest would be Germany where it accounted for 0.03% of total tax revenue in 2018.
| Country | Recurrent Tax on Net Wealth Revenue | Total Tax Revenue | Wealth Tax over Total Tax Revenue |
|---|---|---|---|
| Luxembourg | 1.995 | 27.8 | 7.18% |
| Switzerland | 9.396 | 197.1 | 4.77% |
| Norway | 2.470 | 169.6 | 1.46% |
| Spain | 2.618 | 490.5 | 0.53% |
| Belgium | 1.123 | 238.4 | 0.47% |
| Hungary | 0.154 | 56.9 | 0.27% |
| France | 2.166 | 1280.1 | 0.17% |
| Canada | 0.335 | 564.8 | 0.06% |
| Germany | 0.471 | 1526 | 0.03% |
Estimates for a wealth tax's potential revenue in the United States vary. Several Democratic Presidential candidates in the 2020 primary have proposed wealth tax plans. Senator Elizabeth Warren, for example, has proposed a wealth tax of 2% on net wealth above $50 million and 6% above $1 billion.[4] The Tax Foundation Estimates of revenue generated by Sen. Warren put it around $2.6 trillion over the next 10 years.[5] Separate estimations put the revenue at about 1% of GDP per year, this aligns with USD revenue estimates.[6][2] These estimates put Sen. Warren's tax plan revenues at about $200 billion in 2020[5]. US Tax Revenues in 2018 were $5 trillion in 2018[3], meaning the tax collected by this plan would be equal to 4% of current tax revenues. Additionally, The Tax Foundation estimates 2020 Presidential candidate Bernie Sanders' wealth tax plan would collect $3.2 trillion between 2020 and 2029.[5]
A net wealth tax may also be designed to be revenue neutral if it is used to broaden the tax base, stabilize the economy, and reduce individual income and other taxes.[7]
References
[edit]- ^ a b Edward N. Wolff, "Time for a Wealth Tax?", Boston Review, Feb–Mar 1996 (recommending a net wealth tax for the US of 0.05% for the first $100,000 in assets to 0.3% for assets over $1,000,000
- ^ a b Saez, Zucman (September 4, 2019). "Progressive Wealth Taxation" (PDF). Brookings.
{{cite web}}: CS1 maint: url-status (link) - ^ a b c OECD (2020), "Revenue Statistics: Comparative tables", OECD Tax Statistics (database),https://doi.org/10.1787/data-00262-en (accessed on 17 February 2020).
- ^ Warren, Elizabeth. "Ultra Millionaire Tax".
{{cite web}}: CS1 maint: url-status (link) - ^ a b c "A Wealth Tax Would Increase Foreign Ownership of U.S. Capital". Tax Foundation. 2020-01-27. Retrieved 2020-03-12.
- ^ Saez and Zucman. "Letter to Elizabeth Warren" (PDF).
{{cite web}}: CS1 maint: url-status (link) - ^ "Trump proposes massive one-time tax on the rich – November 9, 1999". cnn.com. Retrieved January 8, 2017.
Category:Personal taxes
Category:Taxation and redistribution
Tax