IEB Report

Political Economy

Do we need a wealth tax?

IEB Report 4/2017

The wealth tax is undoubtedly one of the taxes that gives rise to most discussion in the public arena, in spite of the small amount of revenue it actually generates: in the two countries of the European Union that currently levy such a tax, Spain and France, it represents just 0.3 and 0.5% of their total tax revenue, respectively. The tax seeks to be a levy on the value of all the assets that make up the wealth of an individual, above a minimum threshold that is exempted.The growing inequality in the distribution of wealth – which since the 1980s has doubled with respect to income (Piketty and Zucman, 2014) – and the effects of the Great Recession that are still appreciable have put the issue of inequality at the top of the public agenda, and the wealth tax is seen by many as a necessary tool for addressing this excessive inequality.