Wealth tax: what it is, and why only four rich countries still levy one

A wealth tax is a tax on what a person owns rather than on what they earn: their net worth, meaning the value of their shares, businesses, savings and other assets minus their debts, usually above a high threshold. Most countries that tried one have dropped it. Twelve OECD countries taxed individuals’ net wealth in 1990; by 2017 only four still did, the OECD found. The same four, Switzerland, Norway, Spain and France, were the only members that raised money from one in 2024.

The idea is back in the news because Californians vote on 3 November 2026 on Proposition 40, a one-time 5% tax on the net worth of the state’s billionaires. We cover that vote, and the two rival measures that could cancel it, in a separate report on Prop 40.

What does a wealth tax tax?

Income tax falls on a flow: the wages, dividends or interest a person receives in a year. A wealth tax falls on a stock: everything a person owns on a given date, whether or not it paid anything that year. The California Legislative Analyst’s Office puts it simply in its guide to Proposition 40: wealth is the value of all the things a person owns, and income is how much they earn in a set period.

That makes a wealth tax different from three taxes it is often confused with:

• Property tax falls on one asset, usually land and buildings, and on its gross value. A homeowner with a large mortgage pays it on the whole house.
• Inheritance and estate taxes fall on wealth only when it changes hands at death.
• Capital gains tax falls on the rise in an asset’s value, and only when the asset is sold.

A net wealth tax adds up all of a person’s assets, takes off the debts and charges a small rate on the total, usually every year. Rates are low because the base is large: a 1% tax on a fortune that earns 4% a year takes a quarter of that year’s return.

Which countries have a wealth tax?

In the OECD’s revenue statistics, which classify each tax the same way across its 38 members, four countries raised at least 0.01% of GDP from a recurrent tax on individuals’ net wealth in 2024:

• Switzerland: 1.14% of GDP, or CHF9.4bn, 4.2% of all its tax revenue.
• Norway: 0.60% of GDP, NOK31.1bn, 1.5% of tax revenue.
• Spain: 0.20% of GDP, €3.2bn, 0.5% of tax revenue.
• France: 0.09% of GDP, €2.7bn, 0.2% of tax revenue.

The United States, the UK, Germany, Japan and most other members raise nothing from one. Some countries outside the OECD have wealth taxes too, but the OECD’s data do not cover them in the same way, so we leave them out.

Tax on individuals' net wealth, 2024, % of GDP. Source: OECD, Revenue Statistics, recurrent taxes on net wealth of individuals (code 4210), general government, 2024.

Switzerland	1.14
Norway	0.60
Spain	0.20
France	0.09
United States	0.00
United Kingdom	0.00
Germany	0.00

Source: OECD, Revenue Statistics, recurrent taxes on net wealth of individuals (code 4210), general government, 2024.The Macro Notebook

How many countries have dropped the wealth tax?

The count rose until the mid-1990s and then fell fast. Twelve OECD countries raised money from a tax on personal net wealth in 1995, and four in 2010, our count from the OECD series shows. It has stayed at four since.

OECD countries raising at least 0.01% of GDP from a tax on individuals' net wealth. Source: OECD, Revenue Statistics, recurrent taxes on net wealth of individuals (code 4210); our count of members at or above 0.01% of GDP in each year.

1965	8
1975	9
1985	11
1995	12
2000	7
2005	7
2010	4
2024	4

Source: OECD, Revenue Statistics, recurrent taxes on net wealth of individuals (code 4210); our count of members at or above 0.01% of GDP in each year.The Macro Notebook

The last year each one raised a meaningful sum, in the same data: Austria and Denmark in 1996, Iceland and Italy in 1997, Germany in 1999, Finland and the Netherlands in 2005, and Sweden in 2006. Revenue can trail the end of a tax by a year or two, as late payments come in.

Why did countries abolish wealth taxes?

The OECD’s 2018 review of the subject gives three reasons. Repeals were “often justified by efficiency and administrative concerns”, and by the finding that wealth taxes “have frequently failed to meet their redistributive goals”. Their revenue was also, with a few exceptions, very low.

Each reason has a practical root:

• Valuation. A listed share has a price every day. A private company, a stake in a start-up, art or farmland does not, and each must be valued every year. That costs the tax office and the taxpayer money, and leaves room for dispute.
• Exemptions. To protect family firms, pensions or homes, most wealth taxes left large assets out. The richest hold more of the exempt kinds, so the tax fell harder on the merely well-off.
• Mobility. Wealth, and the people who own it, can move. A tax a neighbour does not charge gives the wealthy a reason to leave.

The OECD’s report also makes the case on the other side: wealth is far more unequal than income, and there is some evidence that the gap has grown in recent decades. That is why the idea keeps coming back.

Does a wealth tax raise much money?

Not much, where it exists. Switzerland’s tax is the largest in the OECD by revenue share, and it raises 4.2% of the country’s taxes. In Norway it is 1.5%, and in Spain and France less than 1%.

California’s proposal is built differently, and the scale shows it. Proposition 40 is a one-time tax of 5% of net worth, due in 2027, which taxpayers could spread over five years at a higher cost. Real estate, pensions and retirement accounts would mostly be excluded. The state’s Legislative Analyst expects it to raise “tens of billions of dollars” spread over several years, and warns that billionaires who move away could cost the state less than $1bn a year in lost income tax after that. It applies to people who lived in California on 1 January 2026, so a billionaire cannot avoid it by moving now. That date is the design’s answer to the mobility problem.

Wealth tax in the US

The United States raises nothing from a tax on net wealth, in the OECD’s data. Its federal and state governments tax income, sales, property and estates, and in 2026 also imports: as we explained on 29 October, the importer pays a tariff at the border and passes most of it on.

California is home to a few hundred billionaires, the Legislative Analyst says. A one-time levy on them would raise less over several years than a broad tax raises in one, but it would be a new kind of tax in the country. The vote, on the day of the midterms, is one of many tests of what voters want from taxes this year; we looked at what markets do after such votes in our item on the stock market after midterms.