Wealth Tax Mobility and Tax Coordination

62 Pages Posted: 21 Aug 2020 Last revised: 16 Oct 2023

See all articles by David R. Agrawal

David R. Agrawal

University of Kentucky - James W. Martin School of Public Policy and Administration; CESifo (Center for Economic Studies and Ifo Institute)

Dirk Foremny

University of Barcelona (Department of Economics); Institut d'Economia de Barcelona; CESifo (Center for Economic Studies and Ifo Institute)

Clara Martínez-Toledano

Columbia University - Columbia Business School, Economics; World Inequality Lab; Imperial College London - Accounting, Finance, and Macroeconomics

Multiple version iconThere are 2 versions of this paper

Date Written: August 16, 2020

Abstract

We study the effects of decentralized wealth taxation on mobility and the effectiveness
of tax coordination at mitigating tax competition. We exploit the reintroduction of the
Spanish wealth tax, after which all regions except Madrid levied positive tax rates. We
find the mobility responses to wealth taxes are within the range of prior estimates with
respect to income taxes. However, wealth tax mobility responses generate losses to
personal income tax revenues that are six times larger than the direct losses to wealth
taxes. Madrid could achieve higher total regional revenues by agreeing to a harmonized
positive tax rate.

Keywords: Fiscal Decentralization, Fiscal Federalism, State and Local Taxation, Wealth Taxes, Mobility, Inequality, Tax Havens, Evasion

JEL Classification: E21, H24, H31, H73, J61, R23

Suggested Citation

Agrawal, David R. and Foremny, Dirk and Martínez-Toledano, Clara, Wealth Tax Mobility and Tax Coordination (August 16, 2020). Available at SSRN: https://ssrn.com/abstract=3676031 or http://dx.doi.org/10.2139/ssrn.3676031

David R. Agrawal (Contact Author)

University of Kentucky - James W. Martin School of Public Policy and Administration ( email )

433 Patterson Office Tower
Lexington, KY 40506-0027
United States
859-257-8608 (Phone)

HOME PAGE: http://www.uky.edu/~drag222/

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.uky.edu/~drag222/

Dirk Foremny

University of Barcelona (Department of Economics) ( email )

c/ John M. Keynes, 1-11
Barcelona, 08034
Spain

Institut d'Economia de Barcelona

Barcelona
Spain

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Clara Martínez-Toledano

Columbia University - Columbia Business School, Economics ( email )

420 West 118th Street
New York, NY 10027
United States

World Inequality Lab ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Imperial College London - Accounting, Finance, and Macroeconomics ( email )

South Kensington campus
London SW7 2AZ
United Kingdom

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