Acceso usuarios
José María Durán Cabré, Alejandro Esteller Moré
Capital taxation is currently under debate, basically due to problems of administrative control and proper assessment of the levied assets. We analyze both problems focusing on a capital tax, the annual wealth tax (WT), which is only applied in four OECD countries, being Spain one of them. We concentrate our analysis on top 1% adult population by using techniques of interpolation, which permits us to describe the evolution of wealth concentration in Spain along the period of analysis (1983-2001). On average top 1% holds about 18% of total wealth, percentage that rises to 19% when tax incompliance and underassessment is corrected for housing, the main asset. The evolution suggests wealth concentration has risen. Regarding WT, we analyze if it helps to reduce wealth inequality or, on the contrary, reinforces vertical inequity (due to especial concessions) and horizontal inequity (due to the de iure and to de facto different treatment of assets). We analyze in detail the two main assets under taxation, real estate property and equity shares. By means of a time series analysis, we try to relate the reported values with reasonable price indicators and other proxies of the propensity to save. We infer net tax compliance is extremely low, which includes both what we commonly understand by (gross) tax compliance and the degree of under-assessment due to fiscal legislation (for real estate property). That low level is especially true for the main asset in Spain, housing, whose level of net tax compliance is well below 50%.
Therefore, we empirically corroborate the difficulties in taxing capital, and so cast reasonable doubts on the current role of the WT in Spain in reducing wealth inequality.
