Behavioural answers to top-financial wealth tax: evidence from Belgium

This paper investigates the behavioural responses of wealthy individuals to a specific wealth tax in Belgium—the Annual Tax on Securities Accounts (ATSA). Unlike general net wealth taxes, ATSA targets the stock value of securities accounts above a defined threshold. Using high-quality individual-level banking data from BNP Paribas Fortis covering 4 million clients (2006–2023), we apply advanced bunching methods to identify taxpayer reactions near the tax thresholds. Preliminary results for the 2019 tax year reveal significant behavioural responses, with a bunching estimate of 2.2, corresponding to a remarkably high elasticity of 29.3. These findings suggest substantial avoidance behaviour, likely facilitated by the narrow tax base and asset reallocation opportunities. Ongoing analyses using non-parametric and dynamic bunching approaches aim to validate and refine these estimates, while forthcoming work will assess tax avoidance mechanisms using difference-in-differences designs. The study contributes to the literature by offering novel evidence on the efficiency and behavioural effects of taxing specific forms of financial wealth.