Since the late 2010s there has been re- newed debate about the merits and demer- its of progressive wealth taxation. This debate has largely...

Wealth Taxation: Lessons from History and Recent Developments By Emmanuel Saez and Gabriel Zucman



Since the late 2010s there has been re- newed debate about the merits and demer- its of progressive wealth taxation. This debate has largely been motivated by the increase in wealth concentration in recent decades. In the United States, the share of total household wealth owned by the 0.0001% wealthiest Americans—a group that includes 18 individuals with more than $50 billion in wealth in 2021—has been mul- tiplied tenfold since Forbes started publish- ing data on the richest Americans in 1982. Wealth concentration has increased partic- ularly fast during the Covid-19 pandemic (see Figure 1). All estimates show a dra- matic increase in wealth concentration since the late 1970s (see Saez and Zucman, 2020 for a discussion of the data and reconcili- ation of the various estimates). Moreover, as wealth concentrated, the ratio of wealth to national income doubled from less than 3 in the late 1970s to over 6 in 2021. Top- end wealth is large relative to the economy, and therefore a sizable potential tax rev- enue source (Saez and Zucman, 2019).
To shed light on the practicality and de- sirability of taxing wealth, this paper stud- ies the historical experience with wealth taxation in Europe. Using new research on the distribution of wealth over time in Eu- rope, we show that the European wealth taxes had a narrow base, due to large exemptions, tax avoidance, and tax eva- sion. We explain why such exemptions were granted and how they undermined Euro- pean wealth taxes, leading in many cases to their repeal.

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