Liquidity issues: solutions for the asset rich, cash poor
Liquidity concerns are oft raised when considering wealth taxes, yet the issue has received scant attention in the extant literature. In this paper we provide the first comprehensive review of the liquidity problem. Our aims are to estimate the scale of the problem, to explore the extent to which ar...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
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Wiley
2021
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| _version_ | 1826310378795040768 |
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| author | Loutzenhiser, G Mann, E |
| author_facet | Loutzenhiser, G Mann, E |
| author_sort | Loutzenhiser, G |
| collection | OXFORD |
| description | Liquidity concerns are oft raised when considering wealth taxes, yet the issue has received scant attention in the extant literature. In this paper we provide the first comprehensive review of the liquidity problem. Our aims are to estimate the scale of the problem, to explore the extent to which archetypal examples are at risk of experiencing low liquidity, and to review the policy options to reduce the scale and impact of liquidity challenges. Using data from Round 6 of the Wealth and Assets Survey, we demonstrate that the scale of the problem depends largely on conceptual and design issues. We find that farmers and business owners are commonly over-represented in the low-liquidity group, but there is little evidence to support the typical narrative surrounding single pensioners. Finally, we conclude our review with a number of preferred solutions to address liquidity issues, including recognising that a net wealth tax can be paid out of income or by sale of assets, by withholding tax (e.g. by pension providers), by borrowing/financing, deferred payment arrangements and, possibly in limited circumstances, payment in specie. |
| first_indexed | 2024-03-07T07:50:56Z |
| format | Journal article |
| id | oxford-uuid:2e9474d0-e367-4178-a54d-b253cac5ea30 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T07:50:56Z |
| publishDate | 2021 |
| publisher | Wiley |
| record_format | dspace |
| spelling | oxford-uuid:2e9474d0-e367-4178-a54d-b253cac5ea302023-07-12T11:51:01ZLiquidity issues: solutions for the asset rich, cash poorJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:2e9474d0-e367-4178-a54d-b253cac5ea30EnglishSymplectic ElementsWiley2021Loutzenhiser, GMann, ELiquidity concerns are oft raised when considering wealth taxes, yet the issue has received scant attention in the extant literature. In this paper we provide the first comprehensive review of the liquidity problem. Our aims are to estimate the scale of the problem, to explore the extent to which archetypal examples are at risk of experiencing low liquidity, and to review the policy options to reduce the scale and impact of liquidity challenges. Using data from Round 6 of the Wealth and Assets Survey, we demonstrate that the scale of the problem depends largely on conceptual and design issues. We find that farmers and business owners are commonly over-represented in the low-liquidity group, but there is little evidence to support the typical narrative surrounding single pensioners. Finally, we conclude our review with a number of preferred solutions to address liquidity issues, including recognising that a net wealth tax can be paid out of income or by sale of assets, by withholding tax (e.g. by pension providers), by borrowing/financing, deferred payment arrangements and, possibly in limited circumstances, payment in specie. |
| spellingShingle | Loutzenhiser, G Mann, E Liquidity issues: solutions for the asset rich, cash poor |
| title | Liquidity issues: solutions for the asset rich, cash poor |
| title_full | Liquidity issues: solutions for the asset rich, cash poor |
| title_fullStr | Liquidity issues: solutions for the asset rich, cash poor |
| title_full_unstemmed | Liquidity issues: solutions for the asset rich, cash poor |
| title_short | Liquidity issues: solutions for the asset rich, cash poor |
| title_sort | liquidity issues solutions for the asset rich cash poor |
| work_keys_str_mv | AT loutzenhiserg liquidityissuessolutionsfortheassetrichcashpoor AT manne liquidityissuessolutionsfortheassetrichcashpoor |