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Vermögenskonzentration in Österreich: Ein Update auf Basis des HFCS 2017

Vermögenskonzentration in Österreich: Ein Update auf Basis des HFCS 2017

Heck, Ines, Kapeller, Jakob and Wildauer, Rafael ORCID: 0000-0001-6395-6286 (2020) Vermögenskonzentration in Österreich: Ein Update auf Basis des HFCS 2017. [Working Paper]

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Abstract

This report uses the third wave of the Household Finance and Consumption Survey (HFCS) to analyse the distribution of household wealth in Austria. Special focus is given to the problem of differential nonresponse bias from which the Austrian survey data is most likely suffering. Taking Blanchet et al.’s (2017) and Blanchet et al.’s (2018) critique into account that reliance on type I Pareto distributions to correct the underreporting in the tail due to differential nonresponse relies on the restrictive assumption of scale invariance, this report presents a new approach. We fit a type II Pareto distribution to the data which allows for nonconstant concentration within the tail of the wealth distribution. We overcome the well known problems of fitting type II distributions to the data by adapting Castillo & Hadi’s (1997) elemental percentile method (EPM). Using this approach results in an increase of aggregate private net wealth in Austria from 985 billion to 1,249 billion Euro. Average household net wealth increases from 250,000 to 318,000 Euro and the top 1% share increases from 23 to 39 percent. Next we use the Pareto-tail-amended data to estimate the revenue potential of four different periodic net wealth tax designs, taking tax evasion into account. Linear model I yields revenues of 5 billion Euro (assuming no evasion), mildly progressive model II yields 8.8 billion Euro (including evasion effects) and progressive model III yields 13.1 billion Euros (assuming strong evasion effects). Model IV is inspired by Piketty (2013) and introduces a maximum wealth level at 1,000 times average wealth (i.e. 318 million Euro). We estimate the revenue potential of model IV to be 91.5 billion Euro in the first year, even when taking strong evasion reactions into account. Models I and II would only be able to slow down increases in wealth inequality, while model III might have the potential to stabilize current levels of inequality and model IV would have the potential to strongly reduce current levels of inequality.

Item Type: Working Paper
Uncontrolled Keywords: wealth distribution, Pareto distribution, wealth tax
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA)
Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA) > Greenwich Political Economy Research Centre (GPERC)
Last Modified: 04 Aug 2021 16:33
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
Selected for REF2021: None
URI: http://gala.gre.ac.uk/id/eprint/30683

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