Wealth tax: complexity and challenges in valuation

A wealth tax is a complicated tax. A euro on your pay slip is a euro on your tax return, but how much exactly is a painting, a machine or a patent worth? And how can taxation of a machine be prevented from causing it to be shut down because it is no longer profitable to operate? After all, in many cases wealth is not stored in safes, it is in production facilities and thus secures jobs.

These are serious objections. In recent years, countries such as Denmark, the Netherlands, Sweden and Austria have therefore stopped directly taxing assets. Germany has a wealth tax, but has not levied it since 1997. In most countries today, wealth is taxed indirectly at most - in the form of taxes on corporate profits (corporate tax), capital gains (withholding tax) or real estate ownership (property tax).