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capital levy

 
Britannica Concise Encyclopedia: capital levy
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Direct tax assessed simultaneously on the capital resources of all persons possessing taxable wealth in excess of a minimum value and paid at least partly out of capital resources. It aims at capturing a substantial portion of the taxpayers' wealth to enable the government to cope with a major emergency or to redistribute wealth. Capital levies were adopted in many European nations after World Wars I and II.

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Columbia Encyclopedia: capital levy
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capital levy, form of taxation by which the government takes part of the capital of any person or business, as distinguished from a tax on personal or business income. It is usually applied to all capital above a certain minimum and may be set aside for a specific purpose, such as the reduction of the public debt. It was used by several European nations experiencing financial difficulties after World War I, and has been advocated as a measure of social welfare and a deterrent to war profits. Opponents of the capital levy stress its implied penalty on saving. In World War II, Great Britain and the United States resorted to extremely high rates of direct taxation in order to accomplish many of the aims of the capital levy.

WordNet: capital levy
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Note: click on a word meaning below to see its connections and related words.

The noun has one meaning:

Meaning #1: a tax on capital or property

Wikipedia: Capital levy
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The Conscientious Burglar.
Paisley humanitarian. "If I could only be quite sure that I shouldn't be discouraging him from saving."
"Mr. Asquith has pronounced himself cautiously in favour of a capital levy, on the condition, amongst others, that it must not be allowed to discourage the habit of saving." Cartoon from Punch magazine, February 11, 1920, illustrating part of the dilemma for governments pondering the use of a capital levy.

A capital levy is a tax on capital rather than income, and is collected once rather than annually. For example, a capital levy of 30% will see an individual or business with a net worth of $100,000 pay $30,000 in tax, regardless of income. It is considered difficult for a government to implement, as the confiscatory nature of taxation is more apparent than with income tax. Thus once such a levy is enacted, capital flight is likely to ensue.

Some economists argue that capital levies are a disincentive to savings and investment, though others argue that in theory this need not be the case.

References

The Capital Levy in Theory and Practice


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Britannica Concise Encyclopedia. Britannica Concise Encyclopedia. © 2006 Encyclopædia Britannica, Inc. All rights reserved.  Read more
Columbia Encyclopedia. The Columbia Electronic Encyclopedia, Sixth Edition Copyright © 2003, Columbia University Press. Licensed from Columbia University Press. All rights reserved. www.cc.columbia.edu/cu/cup/.  Read more
WordNet. WordNet 1.7.1 Copyright © 2001 by Princeton University. All rights reserved.  Read more
Wikipedia. This article is licensed under the Creative Commons Attribution/Share-Alike License. It uses material from the Wikipedia article "Capital levy".  Read more