wealth tax

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Wealth Tax

A tax levied on a person's or company's net assets, as opposed to income. For example, if a person has a net worth of $1 million, the government may assess a wealth tax on this amount over and above the tax on that person's income. Proponents believe this tax promotes equality while critics maintain it discourages accumulation of wealth, which is thought to drive economic growth.
Wealthclick for a larger image
Fig. 89 Wealth. The distribution of marketable wealth in the UK, 2002. The total includes land and dwellings (net of mortgage debt), stocks and shares, bank and building society deposits and other financial assets, but excludes life assurance and pensions. (Source: Social Trends, 2004).

wealth tax

a DIRECT TAX imposed by the government on a person's private assets when those assets are transferred to the person's beneficiaries. Wealth taxes are used by governments principally as a means of promoting social equity by reducing disparities in WEALTH holdings. In the UK INHERITANCE TAX is the current means of taxing wealth.

wealth tax

a TAX levied on a person's private ASSETS when those assets are transferred to the person's beneficiaries. Wealth taxes can be used to redistribute WEALTH within the community as part of government policy on INCOME DISTRIBUTION. The UK's wealth tax has taken various forms over the years, notably estate duties, capital transfer tax and (currently) inheritance tax.

Currently (as at 2005/06) ‘chargeable assets’, such as houses, stocks and shares up to a ‘threshold’ value of £275,000, are tax-exempt. Above £275,000, inheritance tax is levied at a flat rate of 40%. Assets transferred more than seven years before the donor's death are exempt from tax, while assets transferred between three and seven years before death are taxed at a lower rate.

References in periodicals archive ?
"Britain's wealth is undertaxed, and the wealth taxes we do have are in serious need of reform.
"There's a strong case for scrapping council tax and inheritance tax altogether, and replacing them with proper wealth taxes that are more progressive and harder to avoid.
Lord Willetts said higher wealth taxes are needed unless the burden of paying for an ageing population is to be placed entirely on the shoulders of young people who are already struggling to match the living standards of their parents.
Third, property and wealth taxes could be better explored to reduce wealth inequality.
That is why property and wealth taxes are likely to become the foundation of a new political alignment in Europe.
Section 5 will look at the effects of such a tax on efficiency, and in Section 6 some tentative explanations for the (non-)existence of wealth taxes from a political economy perspective are given.
There has been a wave of OECD countries abolishing their personal net wealth taxes recently.
"Many countries which have tried wealth taxes have found they produce unfair results and capital flight on an enormous scale.
As of 2001, annual wealth taxes on motor vehicles were used in twenty-eight states in the United States in the form of either an ad valorem personal property tax, a tax in lieu of a property tax or an age-based fee.
Wealth taxes were abolished in 1969 and, over the last couple of decades, the income tax has become increasingly less progressive.
The government had reportedly agreed with its Left and Green party parliamentary allies to reduce wealth taxes, and now the three parties want to make up for the shortfall by increasing taxation on private pension savings.
of the immovable property, which net wealth taxes with respect to