Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark

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Standard

Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark. / Jakobsen, Katrine Marie Tofthøj; Kleven, Henrik; Zucman, Gabriel; Jakobsen, Kristian Thor.

I: Quarterly Journal of Economics, Bind 135, Nr. 1, 2020, s. 329-388.

Publikation: Bidrag til tidsskriftTidsskriftartikelfagfællebedømt

Harvard

Jakobsen, KMT, Kleven, H, Zucman, G & Jakobsen, KT 2020, 'Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark', Quarterly Journal of Economics, bind 135, nr. 1, s. 329-388. https://doi.org/10.1093/qje/qjz032

APA

Jakobsen, K. M. T., Kleven, H., Zucman, G., & Jakobsen, K. T. (2020). Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark. Quarterly Journal of Economics, 135(1), 329-388. https://doi.org/10.1093/qje/qjz032

Vancouver

Jakobsen KMT, Kleven H, Zucman G, Jakobsen KT. Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark. Quarterly Journal of Economics. 2020;135(1):329-388. https://doi.org/10.1093/qje/qjz032

Author

Jakobsen, Katrine Marie Tofthøj ; Kleven, Henrik ; Zucman, Gabriel ; Jakobsen, Kristian Thor. / Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark. I: Quarterly Journal of Economics. 2020 ; Bind 135, Nr. 1. s. 329-388.

Bibtex

@article{cfe3a0f5b21245689b4b8db025704e2a,
title = "Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark",
abstract = "Using administrative wealth records from Denmark, we study the effects of wealth taxes on wealth accumulation. Denmark used to impose one of the world's highest marginal tax rates on wealth, but this tax was greatly reduced starting in 1989 and later abolished. Due to the specific design of the wealth tax, the 1989 reform provides a compelling quasi-experiment for understanding behavioral responses among the wealthiest segments of the population. We find clear reduced-form effects of wealth taxes in the short and medium run, with larger effects on the very wealthy than on the moderately wealthy. We develop a simple life cycle model with utility of residual wealth (bequests) allowing us to interpret the evidence in terms of structural primitives. We calibrate the model to the quasi-experimental moments and simulate the model forward to estimate the long-run effect of wealth taxes on wealth accumulation. Our simulations show that the long-run elasticity of taxable wealth with respect to the net-of-tax return is sizable at the top of the distribution.",
author = "Jakobsen, {Katrine Marie Tofth{\o}j} and Henrik Kleven and Gabriel Zucman and Jakobsen, {Kristian Thor}",
year = "2020",
doi = "10.1093/qje/qjz032",
language = "English",
volume = "135",
pages = "329--388",
journal = "Quarterly Journal of Economics",
issn = "0033-5533",
publisher = "Oxford University Press",
number = "1",

}

RIS

TY - JOUR

T1 - Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark

AU - Jakobsen, Katrine Marie Tofthøj

AU - Kleven, Henrik

AU - Zucman, Gabriel

AU - Jakobsen, Kristian Thor

PY - 2020

Y1 - 2020

N2 - Using administrative wealth records from Denmark, we study the effects of wealth taxes on wealth accumulation. Denmark used to impose one of the world's highest marginal tax rates on wealth, but this tax was greatly reduced starting in 1989 and later abolished. Due to the specific design of the wealth tax, the 1989 reform provides a compelling quasi-experiment for understanding behavioral responses among the wealthiest segments of the population. We find clear reduced-form effects of wealth taxes in the short and medium run, with larger effects on the very wealthy than on the moderately wealthy. We develop a simple life cycle model with utility of residual wealth (bequests) allowing us to interpret the evidence in terms of structural primitives. We calibrate the model to the quasi-experimental moments and simulate the model forward to estimate the long-run effect of wealth taxes on wealth accumulation. Our simulations show that the long-run elasticity of taxable wealth with respect to the net-of-tax return is sizable at the top of the distribution.

AB - Using administrative wealth records from Denmark, we study the effects of wealth taxes on wealth accumulation. Denmark used to impose one of the world's highest marginal tax rates on wealth, but this tax was greatly reduced starting in 1989 and later abolished. Due to the specific design of the wealth tax, the 1989 reform provides a compelling quasi-experiment for understanding behavioral responses among the wealthiest segments of the population. We find clear reduced-form effects of wealth taxes in the short and medium run, with larger effects on the very wealthy than on the moderately wealthy. We develop a simple life cycle model with utility of residual wealth (bequests) allowing us to interpret the evidence in terms of structural primitives. We calibrate the model to the quasi-experimental moments and simulate the model forward to estimate the long-run effect of wealth taxes on wealth accumulation. Our simulations show that the long-run elasticity of taxable wealth with respect to the net-of-tax return is sizable at the top of the distribution.

U2 - 10.1093/qje/qjz032

DO - 10.1093/qje/qjz032

M3 - Journal article

VL - 135

SP - 329

EP - 388

JO - Quarterly Journal of Economics

JF - Quarterly Journal of Economics

SN - 0033-5533

IS - 1

ER -

ID: 229062742