Why were most wealth taxes abandoned and is this time different?

Abstract

Wealth taxes are increasingly being considered as an option in policy and academic circles to collect additional revenue and address inequality. One objection that is often raised, however, is that they seem to have failed in countries that tried them, with most OECD countries abandoning their wealth taxes in recent decades. This paper gives an overview of OECD countries’ experiences with wealth taxes and explores the different factors that have led to their repeal in most countries. The paper also discusses whether the situation might be different today and what the implications for tax policy might be.

How to Tax Wealth

“…The large number of exemptions is arguably one of the factors behind the low revenues of past wealth taxes and a contributor to their declining use ©International Monetary Fund. Not for Redistribution (Perret 2021). But some wealth taxes are much narrower by construction in that they only cover certain assets rather than attempting to cover broader definitions of wealth (Table 2).…”