Calendrier du 26 septembre 2023
PSI-PSE (Petit Séminaire Informel de la Paris School of Economics) Seminar
Du 26/09/2023 de 17:00 à 18:00
R1-16
GETHIN Amory (PSE)
Distributional Growth Accounting: Education and the Reduction of Global Poverty, 1980-2022
Applied Economics Lunch Seminar
Du 26/09/2023 de 12:30 à 13:30
Salle R2.21
LE GUERN HERRY Ségal (Sciences Po)
Wealth Taxation and Portfolio Allocation at the Top
How does taxation affect portfolio choices at the top? Leveraging a 2017 reform which transformed the French wealth tax into a real estate tax, I estimate the substitution between real estate and financial wealth once tax rates start to differ for both asset classes. To identify causal effects, I use comprehensive tax returns for France and a difference-in-differences design comparing French taxpayers to non-residents subject to the wealth tax but not affected by the policy change. Five years after the reform, the stock of real estate held by French taxpayers decreased by an average of 4%, with responses driven by investment rather than owner-occupied housing. Less than 10% of taxpayers can account for 100% of the observed decrease in real estate, revealing a strong heterogeneity between a minority of tax planners and a majority of households not responding at all. The decrease in real estate held by tax planners is mirrored by a surge in financial capital income received after the reform, consistent with asset shifting responses to the differential tax change. Interpreted through the lens of a stylized model, my estimates imply a cross-elasticity of 5 between real estate and financial wealth, meaning that a 1 percentage point increase in the wealth tax differential between both asset classes imply a 5% shift from real estate to financial wealth.