Taxing or nudging with a tram picture by Rudy and Peter Skitterians and Pixabay

Taxing or nudging? Researchpost #122

Taxing or nudging: 10x new research on wealth taxes, climate nudges, ESG data, buybacks, private equity, GPT and visuals

Social and ecological research: Taxing or nudging?

Efficient taxes: Does a Progressive Wealth Tax Reduce Top Wealth Inequality? Evidence from Switzerland by Samira Marti, Isabel Martínez, and Florian Scheuer as of March 21st, 2023 (#7): “Like in many other countries, wealth inequality has increased in Switzerland over the last fifty years. By providing new evidence on cantonal top wealth shares for each of the 26 cantons since 1969, we show that the overall trend masks striking differences across cantons, both in levels and trends. … Our results imply that a reduction in the top marginal wealth tax rate by 0.1 percentage points in-creases the top 1% (0.1%) wealth share by 0.9 (1.2) percentage points five years after the reform. This suggests that wealth tax cuts over the last 50 years explain roughly 18% (25%) of the increase in wealth concentration among the top 1% (0.1%)” (abstract).

Bad luxury: Taxing luxury emissions by Clinton G. Wallace and Shelley Welton as of March 14th, 2023 (#36): “A host of recent economic and sociological studies have documented the rising challenge of carbon inequality … These disparities are driven by “luxury emissions” produced by the carbon-intensive lifestyles of the rich, which too often include private jets, mega-SUVs, yachts, and multiple mansions. … we explore how to design a carbon tax to target luxury emissions, considering potential tax bases, rates, and revenue uses“ (abstract).

Climate nudging: Can social comparisons and moral appeals increase public transport ridership and decrease car use? By Johannes Gessner, Wolfgang Habla, and Ulrich J. Wagner as of Feb. 8th, 2023 (#17): “Explanations for why social comparisons fail to achieve the desired effects in our setting include (i) boomerang effects … (ii) disregard of how other people, in particular colleagues, travel, (iii) strong habits that are difficult to change … By contrast, we do find evidence that combining a social comparison with a moral appeal, framed in the context of climate change, significantly altered mobility…. Specifically, it decreased car-related mobility expenditures and frequency of use, particularly mostly for taxis and other ride-hailing and ride-sharing services. It increased expenditures on micromobility but not on public transport. Total expenditures did not change significantly” (p. 30).

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