There is a reason that most countries don’t tax total assets — and it’s not generosity. Rather, it is because such taxes are unproductive. As might be expected, wealth taxes lead to capital flight and brain drain; they cause a drop in savings and investment, as well as entrepreneurship. They have high administrative costs (involved in finding and valuing assets). In the end, wealth taxes tend to yield low revenue, while dragging down economic growth. But they do make for good politics, especially in election years; envy commands votes.
French Exports to Avoid: Wealth Taxes
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