Wealth taxes for an eco-social transition: How different tax designs align with post-growth goals

Wealth taxes are frequently proposed within the post-growth policy literature, but evaluations of their alignment with post-growth goals, and empirical estimates of their potential effects, are lacking. We contribute to this literature by examining the extent to which different wealth tax designs can contribute to four goals of a post-growth transition: redistributing wealth; eradicating extreme wealth; curbing rent-seeking; and reducing CO₂ emissions. The analysis is based on microsimulation modelling, using household-level data from 18 countries of the 2017 EU Household Finance and Consumption Survey. It shows that broad-based net wealth taxes with lower thresholds and higher rates are most effective for maximising revenue, reducing top 10% wealth shares, limiting extreme wealth, and lowering inequality-related CO₂ emissions; more targeted net wealth taxes with higher thresholds and rates maximise progressivity and reduce top 1% wealth concentration; while taxes on financial and investment property wealth tend to be most effective at curbing rent extraction (all else equal). However, we also identify trade-offs and conflicts between different tax designs and goals. As a result, a broader package of policies will be necessary to navigate these conflicts and mitigate the limitations inherent in any single wealth tax design.