“No One Pays Less Tax Than Billionaires” – Renowned Economist Zucman Calls for a Global Wealth Tax

The richest people pay the least taxes. What sounds like a story from the Middle Ages is a reality in 2024. We spoke with renowned economist Gabriel Zucman about why this is a problem and what we can do about it. His solution: a global wealth tax.

Interviewer: Can you explain the impact of tax evasion by multinationals and the super-rich on broader society?

Gabriel Zucman: The main impact is that it increases inequality. When the richest people avoid taxes, the rest of the population has to pay more. This allows the super-rich to accumulate even more wealth, which makes inequality worse. That’s why it’s so important to fight tax evasion.

Interviewer: If we could reduce tax evasion, what benefits would there be for the average citizen?

Gabriel Zucman: Firstly, if the richest people and multinational companies paid their fair share of taxes, the rest of us could see lower taxes on income and consumption, like VAT. Secondly, more tax revenue could go to essential public services like education, healthcare, and infrastructure. These are key drivers of economic growth. Overall, this would boost prosperity for everyone.

Interviewer: What specific actions can Austria and the EU take to combat tax evasion by the super-rich and multinational firms?

Gabriel Zucman: There’s a common belief that individual countries can’t effectively address tax evasion, and that these issues can only be solved globally. This is not true. Any country can take action, like imposing a minimum tax on multinational firms. While there’s a global minimum tax of 15%, Austria could increase it to 20% or 25%.

Additionally, Austria could implement a wealth tax for the super-rich. This would require people with more than 100 million euros in wealth to pay at least 2% of their wealth in taxes annually. This is similar to the idea of a minimum tax for multinational firms.

Interviewer: Could you summarize your proposal for a global wealth tax on the super-rich?

Gabriel Zucman: The idea is based on data showing that billionaires have the lowest tax rates of all economic and social groups globally. It’s very easy for the extremely wealthy to avoid taxes. Our proposal, detailed in the Global Tax Evasion Report and currently under discussion at the G20, suggests that billionaires should pay at least 2% of their wealth in income tax annually. For example, someone with 10 billion euros in wealth should pay at least 200 million euros in income tax each year. If they already pay this amount or more, they wouldn’t owe additional taxes. However, most billionaires currently pay little to no tax on their vast wealth, so this proposal would ensure they contribute their fair share.

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