Matthias Krapf

Wealth Taxation in Switzerland

In an ongoing project with co-authors Marius Brülhart, Kurt Schmidheiny and Jonathan Gruber, Matthias Krapf has studied the effects of wealth taxation on reported wealth in Switzerland. Switzerland has the highest rate of annual wealth taxation in the developed world, and tax rates in Switzerland vary considerably across locations and over time. The analysis uses aggregate data on wealth holdings by canton and individual-level data for the canton of Bern. Preliminary results (published in CESifo Working Paper 5966 “Taxing Wealth: Evidence from Switzerland”) suggest implied behavioural elasticities that substantially exceed those of the taxable income literature. Moreover, taxpayers bunch below the tax threshold, and the responses are driven by changes in wealth holdings rather than mobility. Finally, financial wealth is more responsive than non-financial wealth.

During his stay at CESifo, Matthias Krapf will extend this line of research with Swiss administrative data to examine how income and wealth jointly affect income risk and wealth accumulation. This analysis may provide new answers to the question of whether and how to tax wealth stocks or income flows and may, therefore, have important implications for public policy.

Matthias Krapf is currently affiliated with the University of Basel in a position funded by the Swiss National Science Foundation. He was previously affiliated with the Universities of Vienna, Zurich and Lausanne. He holds a doctoral degree from the University of Konstanz. His previous research has been published in journals such as the Journal of International Economics, Economic Inquiry, and the Journal of Economic Behavior & Organization.