Supply is elastic, installment #1637
For taxes too: Using administrative data from Scandinavian countries, we provide evidence on international migration responses to wealth taxes and evaluate their aggregate economic implications. We find significant migration responses among the wealthy: A 1 percentage point increase in the top wealth tax rate decreases the stock of wealthy taxpayers by about 2 percent. A […] The post Supply is…
A new study examining international migration responses to wealth taxes, using data from Scandinavian countries, suggests that a 1 percentage point increase in the top wealth tax rate can lead to a 2 percent decrease in the stock of wealthy taxpayers. The impact on businesses owned by these wealthy individuals is also significant, with a potential 0.02 percent reduction in employment, 0.07 percent decrease in investments, and 0.10 percent drop in value added.
While the aggregate effects of such tax increases are modest, the study highlights the potential consequences for employment and economic activity. The findings, authored by Katrine Jakobsen, Henrik Kleven, Jonas Kolsrud, Camille Landais, and Mathilde Munoz, are published in the latest issue of the American Economic Review.
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