We study how declared wealth responds to changes in wealth tax rates. Exploiting rich intranational variation in Switzerland, we find a 1 percentage point drop in a canton's wealth tax rate raises reported taxable wealth by at least 43 percent after 6 years. Administrative tax records of two cantons with quasi-randomly assigned differential tax reforms suggest that 24 percent of the effect arises from taxpayer mobility and 21 percent from a concurrent rise in housing prices. Savings responses appear unable to explain more than a small fraction of the remainder, suggesting sizable evasion responses in this setting with no third-party reporting of financial wealth.
Brülhart, Marius, Jonathan Gruber, Matthias Krapf, and Kurt Schmidheiny.
"Behavioral Responses to Wealth Taxes: Evidence from Switzerland."
American Economic Journal: Economic Policy,
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Tax Evasion and Avoidance
Fiscal Policies and Behavior of Economic Agents: Household