The increase of wealth inequality in many EU countries has spurred interest in wealth taxation. While taxes on wealth for
a long time have played only a marginal role in the public finance and taxation literature, in the more recent literature
a variety of arguments are brought forward in favour of (higher) wealth taxation. Most of these arguments directly or indirectly
refer to the potential of wealth taxes to contribute to various dimensions of sustainability, in particular to economic, social,
and/or institutional/cultural sustainability. Tax competition has led to an almost complete disappearance of recurrent taxes
on personal or corporate net wealth in Europe. EU-wide implementation of a net wealth tax based on harmonised tax provisions
may serve as a first step in a longer-term oriented move of the stepwise expansion of net wealth taxes on a global scale.
By dealing with non- and under-reporting in the Household and Consumption Survey (HFCS) data set provided by the European
Central Bank, we are able to estimate the wealth distribution within 20 EU countries. Applying a progressive household-based
tax schedule with a tax rate of 1 percent for net wealth above 1 million € and 1.5 percent for net wealth above 5 million
€ on these adjusted wealth distributions yields potential tax revenues of 156 billion €, taking into account the behavioural
responses of individuals triggered by net wealth taxation. Given the positive sustainability properties of a net wealth tax
with regard to economic efficiency and social inclusion, a European net wealth tax offers itself as an interesting candidate
for sustainability-oriented tax-based own resources to finance the EU budget.
Forschungsbereich:Makroökonomie und europäische Wirtschaftspolitik