13 OECD countries tried wealth taxes. Most repealed them.
The Tax Foundation's scorecard gives advisors a concrete baseline for a familiar client question.
At least 13 OECD countries have imposed a net wealth tax since the 1960s, and most have since abandoned it, according to an analysis from the Tax Foundation. The op-ed, by economist Cristina Enache and originally published in Project Syndicate, reads the record as a cautionary tale. Governments reversed course, it says, after the taxes encouraged capital flight, weighed on investment and growth, and ran up administrative and compliance costs while raising less revenue than promised.
At least 13 OECD countries have imposed a net wealth tax since the 1960s, and most have since abandoned it.
Spain, Norway, and Switzerland are among the few countries that still levy broad net wealth taxes, and even they collect modest revenue — typically between 0.2 percent and just over 1 percent of GDP. That range is the working evidence behind the argument that the taxes bring in little even where they remain.
The analysis targets current proposals: a supranational wealth tax in the European Union, California's billionaire tax, and similar measures floated in New York, France, and Denmark. Enache's case is that these are not a new idea but a retread of policies that have already been tested — and that the test results were poor.
For wealth managers, the piece offers a ready answer to a familiar client question. When a client walks in with a headline about a billionaire tax and asks whether their own net worth might be caught, the advisor has a concrete baseline: 13 countries, six decades, and a surviving tax take that typically lands between 0.2 percent and just over 1 percent of GDP. That does not settle the political debate — a wealth tax could still win votes — but it moves the conversation from alarm to arithmetic.
The deeper value is behavioral. Enache's catalogue of what doomed the old taxes — capital flight, base erosion, legal challenges — is the standard material of tax planning. Whatever happens to the current proposals, that is the ground on which they will be fought.