Taxing Top Wealth: Migration Responses and Their Aggregate Economic Implications

Using administrative data from Scandinavian countries, we provide evidence on international migration responses to wealth taxes and evaluate their aggregate economic implications. We find significant migration responses among the wealthy: A 1 percentage point increase in the top wealth tax rate decreases the stock of wealthy taxpayers by about 2 percent. A large fraction of the wealthy are business owners, and their businesses are negatively affected by owner out-migration. The aggregate effects are nevertheless modest: The migration responses to a 1 percentage point increase in the top wealth tax rate reduce employment by 0.02 percent, investments by 0.07 percent, and value added by 0.10 percent. (JEL D31, E22, E24, F22, H24, L26, K34)