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  5. Taxing Top Wealth: Migration Responses and their Aggregate Economic Implications

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Taxing Top Wealth: Migration Responses and their Aggregate Economic Implications

  • Katrine Jakobsen
  • Henrik Kleven
  • Jonas Kolsrud
  • Camille Landais
  • Mathilde Munoz
American Economic Review (Forthcoming)

Abstract

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 1pp increase in the top wealth tax rate decreases the stock of wealthy taxpayers by about 2%. A large fraction of the wealthy are business owners, and their businesses are negatively affected by owner out-migration. The aggregate effects are nevertheless modest: the migration responses to a 1pp increase in the top wealth tax rate reduce employment by 0.02%, investments by 0.07%, and value-added by 0.10%.

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