Economics of Macro Issues 7th Edition by Roger LeRoy Miller,Daniel Benjamin

Exercise 2

Many European countries have imposed a wealth tax. It is typically based on everything a person owns, minus everything the person owes (the difference between what is owned and what is owed is called net worth ). Put yourself in the shoes of an individual in a country that has just decided to impose a wealth tax. How does a wealth tax affect your incentive to accumulate wealth? How does it affect your incentive to work hard?