Wealth Tax

A wealth tax (also called a capital tax, equity tax, or net worth tax) is a levy on the total value of personal assets, including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and unincorporated businesses; and , financial securities, and personal trusts. Typically liabilities (primarily mortgages and other loans) are deducted, hence it is sometimes called a net wealth tax.

A wealth tax taxes the accumulated stock of purchasing power, in contrast to income tax, which is a tax on the flow of assets (a change in stock).

Some jurisdictions require declaration of the tax payer's balance sheet (assets and liabilities), and from that ask for a tax on net worth (assets minus liabilities), as a percentage of the net worth, or a percentage of the net worth exceeding a certain level. Wealth taxes can be limited to natural persons or they can be extended to also cover legal persons such as corporations.

Iceland had a wealth tax until 2006 and a temporary wealth tax reintroduced in 2010, for four years. The tax was levied at a rate of 1.5% on net assets exceeding 75,000,000 kr for individuals and 100,000,000 kr for married couples.

Some other European countries have discontinued this kind of tax in the recent years: Austria, Denmark (1995), Germany (1997), Finland (2006), Luxembourg (2006) and Sweden (2007). In the United Kingdom, property (real estate) is often a person's main asset, and has been taxed - for example the window tax of 1696, the rates, to some extent the Council Tax, and a new Mansion Tax proposed by some political parties.

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