Scandinavian Working Papers in Economics
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Department of Economics, Lund University Working Papers, Department of Economics, Lund University

No 2002:20:
The Wealth Tax and Economic Growth

Åsa Hansson ()

Abstract: Heated discussions of the economic effects of the wealth tax have raged in the popular media in a number of European countries. The academic community has been considerably quieter, however. This paper attempts to fill this gap by empirically estimating the relationship between the wealth tax and economic growth in 20 OECD countries over the time period 1980 to 1999. Using an instrumental variables approach and "differenced" data to control for two types of endogeneity, I find fairly robust support for the popular contention that wealth taxes dampen economic growth. The estimated magnitude, however, is somewhat less alarming than popular account.

Keywords: Wealth tax; economic growth; OECD countries; (follow links to similar papers)

JEL-Codes: H20; H24; O40; O57; (follow links to similar papers)

22 pages, October 30, 2002

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This paper is published as:
Hansson, Åsa, (2010), 'Is the Wealth Tax Harmful to Economic Growth?', World Tax Journal, Vol. 2, No. 1, pages 19-34

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