Examining the Relationship Between Wealth Tax Bases and the Misery Index in Iran: Evidence for Capital Gains Tax Policy Design

Document Type : Original Article

Authors

1 Tax Audit, Tax Affairs Organization, West Azerbaijan, Iran

2 Tax Audit, Tax Affairs Organization,

Abstract

This study examines the relationship between wealth-oriented tax bases and the misery index across Iranian provinces over the period 2011–2023 and provides evidence relevant to capital gains tax (CGT) policymaking. The main estimations were conducted using bootstrap quantile regression at the 0.25, 0.50, and 0.75 quantiles to account for interprovincial heterogeneity and to examine variations in the relationship between the variables across different levels of the misery index. In addition, the Generalized Method of Moments (GMM) estimator was employed to assess the robustness of the findings and address potential endogeneity concerns. The results indicate that wealth tax per capita (used as a proxy for capital gains tax capacity) is inversely associated with the misery index across all quantiles, with the magnitude of this relationship increasing slightly at higher levels of the misery index. Furthermore, the effects of average household income, industrial employment rate, and educational attainment were examined as control variables to account for the economic and social characteristics of provinces and their potential contribution to variations in the misery index. The supplementary GMM estimates provided supporting evidence for the robustness of the main findings.

Overall, the findings suggest that regional differences should be taken into account when designing and evaluating wealth-oriented tax policies. Moreover, given that capital gains tax constitutes one of the wealth-oriented tax bases, the results may be interpreted as indirect evidence supporting the evaluation and further development of this tax instrument within the broader framework of tax system reform in Iran and other emerging economies worldwide.

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Main Subjects

References

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History

  • Receive Date: 21 April 2026
  • Revise Date: 15 September 2026
  • Accept Date: 21 September 2026

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