TY - JOUR

T1 - The End of Bank Secrecy

T2 - Implications for Redistribution and Optimal Taxation

AU - Johannesen, Niels

PY - 2023

Y1 - 2023

N2 - This paper argues that the ability to enforce taxes on offshore income may shape the redistributional properties of the tax system through two channels. First, it mechanically raises tax progressivity for given parameters of the tax system because high-income taxpayers own most of the offshore wealth. In the US, recent comprehensive reporting by offshore banks suggests the mechanical increase in average tax rates may be around 1.5 percentage points for the top 0.01 per cent and virtually zero below the top 1 per cent. Second, it may further raise tax progressivity by changing the trade-offs underlying optimal taxation in favour of higher taxation of top incomes.

AB - This paper argues that the ability to enforce taxes on offshore income may shape the redistributional properties of the tax system through two channels. First, it mechanically raises tax progressivity for given parameters of the tax system because high-income taxpayers own most of the offshore wealth. In the US, recent comprehensive reporting by offshore banks suggests the mechanical increase in average tax rates may be around 1.5 percentage points for the top 0.01 per cent and virtually zero below the top 1 per cent. Second, it may further raise tax progressivity by changing the trade-offs underlying optimal taxation in favour of higher taxation of top incomes.

U2 - 10.1093/oxrep/grad024

DO - 10.1093/oxrep/grad024

M3 - Journal article

VL - 39

SP - 565

EP - 574

JO - Oxford Review of Economic Policy

JF - Oxford Review of Economic Policy

IS - 3

ER -