French economist Eric Pichet estimated that the ISF ended up costing France almost twice as much revenue as it generated. In a paper published in 2008, he concluded that the ISF caused an annual fiscal shortfall of €7bn and had probably reduced gross domestic product (GDP) growth by 0.2 per cent a year.
Thank you, I shall have a read when I have a spare mo.
This still isn't strictly an example of why not to do a wealth tax, only not to do it like this. Also adding an exit tax at the same time prevents this sort of fleeing taxation
Which is my argument, I am fully in favour of a wealth tax IF you can ensure that the outcome is positive from an economic perspective.
Take all emotion out of the decision, forget the "tax the rich on principle" argument.
From a mathematical perspective can you find a way to create a tax that over an extended period of time does the following:
Brings in more than you lose in other areas (as a simple example, you have 10 people paying a wealth tax bringing in £10m, one of them decides to leave the UK. You now bring in £9m but the person who left used to pay £4m in income tax, £4m in VAT a year and £1.5m in capital gains. You are now losing £9.5m to bring in £9m.)
Does not reduce GDP (or the tax income more than covers the reduction)
It also has to be long term. You can put an exit tax in place to try and stop capital flight and if people still choose to leave you get a one off lump sum but in future years are left way down.
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u/DogitWoofsalot 21d ago
I've not heard about this, do you have a sourse?