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Ring, Marius & Thoresen, Thor Olav
(2025).
Wealth Taxation and Charitable Giving.
Review of Economics and Statistics.
ISSN 0034-6535.
p. 1–45.
doi:
10.1162/rest_a_01562.
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We use third-party reported data and two quasi-experiments from Norway to study how tax incentives affect charitable giving. First, using a shock to wealth tax exposure, we estimate the semi-elasticity of giving with respect to the after-tax return on wealth. Inconsistent with the notion that households accelerate giving to reduce future taxes, we find that a 1% wealth tax reduces giving by 26%. Second, using bunching at an income-tax deduction threshold, we estimate a moderate own-price elasticity of giving of -0.44. This elasticity exhibits little heterogeneity with respect to income and wealth but is considerably larger for religious giving.
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Ring, Marius
(2024).
Wealth Taxation and Household Saving: Evidence from Assessment Discontinuities in Norway.
Review of Economic Studies.
ISSN 0034-6527.
92(5),
p. 3375–3402.
doi:
10.1093/restud/rdae100.
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Neither theory nor existing empirical evidence support the notion that wealth taxation reduces saving. Theoretically, the effect is ambiguous due to opposing income and substitution effects. Empirically, the effect may be masked by misreporting responses. Using geographic discontinuities in the Norwegian annual net-wealth tax and third-party-reported data on savings, I find that wealth taxation causes households to save more. Each additional NOK of wealth tax increases annual net financial saving by 3.76, implying that households increase saving enough to offset both current and future wealth taxes. This positive effect on saving is primarily financed by increases in labour earnings. These responses are the combination of small negative effects of increasing the marginal tax rates and larger positive effects of increasing average rates. My findings imply that income effects may dominate substitution effects in household responses to rate-of-return shocks, which has implications for both optimal taxation and macroeconomic modelling.
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Published
June 13, 2025 2:37 PM
- Last modified
June 13, 2025 2:37 PM