Public economics

Accounting

Tax avoidance

Biology

Value-added tax

Elasticity (physics)

Indirect tax

Taxable income

Econometrics

Paleontology

Composite material

Tax credit

Economics

Microeconomics

Materials science

Incentive

Context (archaeology)

Tax planning

Ad valorem tax

Monetary economics

Tax reform

Fiscal Studies

In this paper, we review the existing empirical evidence on how individuals respond to the incentives created by a net wealth tax. Variation in the overall magnitude of behavioural responses is substantial: estimates of the elasticity of taxable wealth vary by a factor of 800. We explore three key reasons for this variation: tax design, context and methodology. We then discuss what is known about the importance of individual margins of response and how these interact with policy choices. Finally, we use our analysis to systematically narrow down and reconcile the range of elasticity estimates. We argue that a well‐designed wealth tax would reduce the tax base by 7–17 per cent if levied at a tax rate of 1 per cent.

Behavioural responses to a wealth tax