Wealth Tax Mobility and Tax Coordination

65 Pages Posted: 15 Apr 2024

See all articles by David R. Agrawal

David R. Agrawal

University of California, Irvine; 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 Martinez-Toledano

Imperial College London

Multiple version iconThere are 3 versions of this paper

Date Written: October 2023

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: wealth taxes, mobility, fiscal decentralization, fiscal federalism, tax coordination

JEL Classification: E210, H240, H310, H730, J610, R230

Suggested Citation

Agrawal, David R. and Foremny, Dirk and Martinez-Toledano, Clara, Wealth Tax Mobility and Tax Coordination (October 2023). CESifo Working Paper No. 11048, Available at SSRN: https://ssrn.com/abstract=4793904 or http://dx.doi.org/10.2139/ssrn.4793904

David R. Agrawal (Contact Author)

University of California, Irvine ( email )

School of Education
3200 Education
Irvine, CA 92697-5500
United States

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 Martinez-Toledano

Imperial College London ( email )

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