Defining the tax base: Design issues

Emma Chamberlain

Wealth and Policy, Working Paper 108

30 Oct 2020

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This paper considers several key issues regarding the design of the tax base for a wealth tax. First, I address the question of ‘who pays’, including the definition of the tax unit (e.g. whether individual or household) and the appropriate territorial connections with the UK for persons and assets. I also consider the tax treatment of trusts, foundations and estates under a wealth tax. Second, I consider issues relating to the definition of the tax base. I argue that in principle – leaving aside challenges of valuation and liquidity – a wealth tax should be broad-based covering all types of asset. I also discuss the deductibility of debt. Finally, I highlight how the threshold and rates of a wealth tax might affect key design choices.

DOI: 10.47445/108
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