The countries of the global North and South are facing one of the greatest challenges in their history: building an economic structure that is in harmony with planetary boundaries. Distributional issues are often seen only as a side condition of a successful “techno-ecological” transformation, for example in the context of the European Green Deal. In contrast, there are proposals for a “socio-ecological” Green New Deal, which believe that the ecological crisis can only be overcome if distributional aspects are placed at the center of economic policy. The debate on tax policy reflects these different approaches. Consumption and classic emissions taxes are at the center of most proposals; wealth taxes are an important element of proposals for a more fundamental restructuring of the economy. In both cases, however, there is a need for clarification with regard to the actual effects of wealth taxes.
The question of what socio-ecological effects emanate from an increasingly unequal distribution of wealth and from a corresponding taxation of wealth has so far been inadequately answered. The project fills this gap by investigating the role wealth taxes could play in a socio-ecological reorientation of public finances. It takes a holistic view of the political economy as well as the environmental, employment and growth policy dimensions of increased wealth taxation. What are the potential effects of wealth taxes on the environment? What effects can be expected from different forms of taxation on distributional measures, employment and economic performance? How do wealth taxes affect the acceptance of socio-ecological policies, and what role do they play with regard to the power and democracy issues that are inevitable in the course of a “grand” transformation?
The project combines quantitative and qualitative methods as well as economic and social science perspectives. The economic part of the analysis complements financial approaches with quantitative econometric approaches, e.g. from the field of experimental economics. In the social science part of the analysis, the results of the economic investigation are embedded to ensure the practical relevance of the results. Here, the analysis is based on an evaluation of scientific, political and activist texts and opinion pieces, as well as on a series of interviews.