Taxation of Household Savings

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This report provides a detailed review of the taxation of household savings in 40 OECD and partner countries. It examines the different approaches that countries take to taxing household savings, and calculates marginal effective tax rates on a wide range of savings vehicles (including bank accounts, bonds, shares, private pensions and housing) to assess the impact of these approaches on savings behaviour. It examines asset holdings across income and wealth distributions to help assess the distributional impact of savings taxation, and discusses recent changes in the exchange of information for tax purposes between tax administrations. It also draws out a range of implications from this analysis for savings tax policy as part of an inclusive growth tax agenda.



Conclusions and policy options

This chapter presents the conclusions of the Taxation of Houshold Savings report and discusses potential tax policy options. It concludes that, while countries do not necessarily need to tax household savings more, there is significant scope to improve the way countries tax household savings. Most significantly, there are opportunities for countries to increase neutrality in taxation across assets and thereby improve both the efficiency and fairness of their tax systems. There may also be opportunities for many countries to increase progressivity in their taxation of savings. At the same time, there remains a case for well-designed preferential tax treatment of private pensions in order to encourage retirement savings. The chapter also highlights opportunities for improvement in tax design regarding private pensions and in a number of other areas such as residential property, in particular to improve the equity of the tax system.



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