Wealth taxes, while not a new idea, are gaining popularity as a solution to the debts that governments have taken on as a result of the COVID-19 pandemic.
The wealth tax has become the subject of fierce debate as progressive 2020 Democratic candidates champion it as a mechanism to redistribute wealth and curb the economic power of the wealthiest Americans. Though it’s a relatively new proposal in the US, many European nations adopted it decades ago.
The wealth tax is similar to a property tax. But instead of taxing real estate, it covers wealth in all forms: stocks, cash, jewellery, yachts, a Pablo Picasso painting — really any asset that could be appraised a monetary value.
Today, four European countries have a wealth tax: Spain, Norway, Switzerland, and Belgium says Business Insider.
For example, Spain has a wealth tax levied on fortunes above €700,000, or just over $774,000, starting at a 0.2% rate. Norway collects a wealth tax both at the municipal and the national level, starting at 1.48 million kroner, or $174,000.
If more countries introduce wealth taxes, it becomes harder to move jurisdictions to ‘hide’ your wealth from tax. It means that perhaps tax planning needs a new perspective. Want a conversation?