The most common response I hear when discussing the historical experimentation, failure, and repeal of global wealth taxes is, “What about Switzerland… or Norway?”
The number of countries in the Organisation for Economic Co-operation and Development (OECD) with annual wealth taxes fell from 12 in the 1990s to 4 today. Chris Edwards and I document this history in our policy analysis, “Failures of Wealth Taxation.”
But the four holdouts only strengthen the case against taxing wealth in the US. Each is briefly surveyed below. Norway, Spain, and Colombia are experiencing the same avoidance, evasion, and capital flight that led most of Europe to repeal its wealth taxes. Switzerland’s wealth tax is not immune to these pressures, but its damage is offset by the rest of its capital-friendly fiscal system.
Switzerland
The Washington Post recently published my letter to the editor responding to Warren Gorlick’s op-ed, “Tax the Rich? Follow Switzerland—Not the Left.” Gorlick is right that Switzerland’s fiscal model is worth copying. But my letter, excerpted below, argues that its wealth tax is the wrong feature to emulate.
The Swiss government is much smaller than ours. According to the Organization for Economic Cooperation and Development, in 2024 total government spending in Switzerland was only about 32.5 percent of gross domestic product, compared with about 39.6 percent in the United States. Swiss voters have also locked in fiscal discipline with a constitutionally required debt brake — a form of balanced-budget rule — that ties spending to projected revenue, permits deficits during downturns and requires the government to run surpluses to pay them back.
Yes, Switzerland also has a low-rate wealth tax, but the rest of its fiscal system offsets the damage. The country generally has no individual capital gains tax, low corporate income taxes, and moderate value-added and individual income taxes. And even with the rest of the system compensating, researchers have found that small decreases in the wealth tax rate have large positive effects on reported wealth.
The lesson from Switzerland is not that the U.S. needs a wealth tax or more revenue. It’s that the U.S. needs to spend less. Switzerland is a model despite its wealth tax, not because of it.
Norway
In 2022, Norway raised its wealth tax rates, and today the top rate is 1.1 percent. Along with changes to capital gains and dividend taxes, the hikes set off a widely reported exodus of wealthy Norwegians to other low-tax countries, including Kjell Inge Røkke, one of the country’s largest taxpayers.
Tord Ueland Kolstad, a real estate investor who moved to Lucerne, Switzerland, in 2022, described the wealth tax’s effects as “either leave Norway or sell your company.” Kolstad says after the move, he could get several calls a week from other Norwegians considering moving.
Norway’s Ministry of Finance estimated that in 2022 and 2023, Norwegians leaving the country took about $15 billion in deferred income with them, representing more than $5 billion in forgone tax revenue.
The taxpayers who stay also respond. Three Norwegian academics find that owners shift wealth into closely held businesses that receive valuation discounts. Others move within Norway. In 2021, the northern municipality of Bø cut its wealth tax rate. The resulting response implied that after a 1 percentage-point cut in the tax rate, average taxable wealth increased by 60 percent, driven by a more than one-third increase in the number of wealth taxpayers moving.
Former cross-country ski champion Bjørn Dæhlie reportedly withdraws $600,000 to $800,000 a year from his investment company to pay the wealth tax, which is often about as much as the company earns in a year. To limit the costs of the wealth tax, Dæhlie moved to Bø after the tax cut.
Spain
The wealth tax rates and thresholds in Spain are set by the regions, with a national default top tax rate of 3.5 percent.
In previous iterations of the wealth tax, Madrid effectively eliminated it for local residents with a 100 percent credit. In the years after Madrid zeroed out its wealth tax, its stock of wealthy taxpayers grew, and the regions losing residents gave up six times more personal income tax revenue than wealth tax revenue.
The 2022 national backstop Solidarity Tax on Large Fortunes overrode the regional credits. The national tax raised only about 40 percent of the revenue the government expected and precipitated a reported exodus of wealthy taxpayers moving to neighboring Portugal.
Colombia
Colombia made its wealth tax permanent in 2022, with a top rate of 1.5 percent, after decades of intermittent use. But it might be the next country to repeal a wealth tax. At his inauguration in August 2026, President Abelardo de la Espriella promised to eliminate the wealth tax.
After Colombia expanded the wealth tax in 2010, Banco de la República economists found that newly taxed small and medium-sized businesses faced tighter credit because the tax drained their capital, leading them to cut investment, productivity, and employment.
Individuals also respond by hiding wealth. Juliana Londoño-Vélez and Javier Ávila-Mahecha find that when Colombian wealth tax rates rise, taxpayers immediately cut reported wealth by understating hard-to-verify assets and inflating debts. The same researchers find that two-fifths of the wealthiest 0.01 percent of Colombian taxpayers evaded the tax, concealing about one-third of their wealth offshore.
And as one wealth adviser put it, “Colombia’s ultra-rich, they don’t fiscally reside in Colombia.” The country’s two richest people, Jaime Gilinski and David Velez, live in Panama and Uruguay. Even sports stars, like soccer player Radamel Falcao, arrange their contracts to avoid tripping the residency rules to sidestep the tax.
A History of Failures
Even where they still exist, wealth taxes face the same pressures that led to their repeal in other countries. The experiences of Colombia, Norway, and Spain show that wealth taxes are subject to widespread tax avoidance, lower-than-expected revenue, and capital flight. Switzerland is not immune to these pressures; however, the rest of its fiscal system compensates for the wealth tax’s damage.
