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Taxes and the revaluation of household wealth

Published online by Cambridge University Press:  26 May 2021

Edward N. Wolff
Edward N. Wolff*
Affiliation:
Department of Economics, New York University, New York, NY, USA National Bureau of Economic Research, Cambridge, MA, USA
*
Corresponding author. Email: ew1@nyu.edu
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Abstract

I compare pre-tax and post-tax wealth levels and trends after netting out implicit taxes on tax-deferred assets and accrued capital gains. The analysis covers 1983–2016 for net worth (NW) and augmented wealth (AW), which includes pension and Social Security wealth. Netting out implicit taxes substantially reduces growth in mean and median NW and AW. However, the upward trajectory in NW and AW inequality is basically unchanged from using post-tax values. I also introduce bequest wealth, the value of the estate including death benefits. It is notably more equal than NW and has grown faster over time.

Keywords

Estate taxeshousehold wealthincome taxesinequalitypensionsSocial SecurityD31H31J1
Type
Article
Information
Journal of Pension Economics & Finance , Volume 21 , Issue 4 , October 2022 , pp. 537 - 564
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

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