How to Measure and Value Wealth for a Federal Wealth Tax Reform

23 Pages Posted: 6 Apr 2021 Last revised: 28 Jun 2021

See all articles by David Gamage

David Gamage

Indiana University Maurer School of Law

Ari D. Glogower

Ohio State University (OSU) - Michael E. Moritz College of Law

Kitty Richards

Independent

Date Written: 2021

Abstract

This report explains the best approaches for valuing the most important categories of taxpayers’ wealth for implementing a wealth tax reform. As this report will explain, although there are many difficulties involved in designing a valuation and measurement system, these difficulties are not inherently more challenging when it comes to designing and implementing a wealth tax than they are for designing and implementing an income tax. This report explains how a wealth tax could use a combination of formulaic valuations and appraisals to arrive at sufficiently accurate valuations so as to minimize the opportunity for tax avoidance through undervaluation. Although this approach involves some complexities and imperfections, and will require increased IRS funding and other enforcement resources, these costs are relatively small compared to the revenue and equity considerations at stake. Through a combination of increased IRS funding and enforcement resources and a practical mix of formulaic valuations and appraisals, a wealth tax could be designed so as to raise substantial revenues from the very wealthy and restore equity to our tax system.

Keywords: Taxpayers, Wealth, Wealth Tax, Wealth Tax Reform, Income Tax, Tax Avoidance, IRS, Internal Revenue Service, Wealth Inequality, Income Inequality

JEL Classification: H2, H24, H26, K34

Suggested Citation

Gamage, David and Glogower, Ari D. and Richards, Kitty, How to Measure and Value Wealth for a Federal Wealth Tax Reform (2021). Roosevelt Institute Issue Brief (2021), Indiana Legal Studies Research Paper No. 444, Ohio State Legal Studies Research Paper No. 627, Available at SSRN: https://ssrn.com/abstract=3817773

David Gamage (Contact Author)

Indiana University Maurer School of Law ( email )

211 S. Indiana Avenue
Bloomington, IN 47405
United States

HOME PAGE: http://www.law.indiana.edu/about/people/bio.php?name=gamage-david

Ari D. Glogower

Ohio State University (OSU) - Michael E. Moritz College of Law ( email )

55 West 12th Avenue
Columbus, OH 43210
United States

Kitty Richards

Independent ( email )

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