Latest news with #GabrielZucman
The Guardian
24-07-2025
- Business
- The Guardian
The Guardian view on global inequality: the rising tide that leaves most boats behind
This year's global wealth report by the City bank UBS confirms what is self-evident but rarely confronted: while riches are accumulating, their distribution remains starkly unbalanced. In the 56 countries and economic areas surveyed, the report says global personal wealth grew 4.6% in 2024. However, not all boats have been lifted by this tide. The gap is growing between those who hold assets and those who don't. The figures are shocking: just 60m of the world's adults – 1.6% of the population – have net personal wealth of $226tn, or 48.1% of all the world's riches. At the other extreme, four in 10 adults – 1.57bn people – have only $2.7tn, or just 0.6% of all the world's personal wealth. Economists now argue that inequality is no longer a by-product of growth but a condition of it. In the US, soaring bond markets and tech stocks have benefited the ultra-rich and deepened inequality. Nine households, it was reported, control 15% of wealth in Silicon Valley. By contrast, UBS says British median wealth rose while average wealth fell. This is a rare divergence, probably caused by prosperous households in London taking a hit from interest rate hikes as house prices dropped and debt costs rose. This wasn't a sign of shared prosperity but of paper losses at the top, while ordinary workers held steady. Unlike wages, wealth reflects not just income but also access to assets, favourable institutional conditions – such as low interest rates – and public policies like low taxes and housing shortages. In other words, wealth depends on political choices in ways that income currently does not. It's not just the inequality itself that is the issue but the erosion of mechanisms that once constrained it. As the report notes, wealth and income inequality are linked. But where wages have stagnated and collective bargaining has weakened, capital income – derived from profits, rents and interest – has been boosted by design. Productivity gains, once expected to feed through to broader living standards, now primarily serve to enhance returns to wealth. Taxes on wealth are necessary to make societies more equal. Unfairness is aiding far-right autocrats whose rise brings the risk of democratic collapse. In July seven Nobel laureates issued a powerful call for a minimum tax on the ultra-rich. Brazil, Spain and South Africa have demanded a global tax on the super-rich, placing the issue on the G20 agenda. Pioneering work by economists such as Gabriel Zucman and Emmanuel Saez led to the French national assembly passing a law this year for a 2% minimum tax on wealth over €100m. The legislation, regrettably, has not proceeded past the senate. Progressive taxation is necessary, but it doesn't address a core problem in many economies: when capital income outpaces labour income, redistribution may ease the symptoms of neoliberalism, but it leaves the underlying condition untreated. High inequality suppresses consumption, deters investment and slows growth. The gap between rich and poor is not just unfair – it's economically unsustainable. Without strong domestic demand, economies increasingly rely on debt, speculation and asset bubbles to fuel growth. Changing this would take more than fiscal transfers. It would require policies that boost wages: full employment, stronger labour unions and public investment. Private ownership itself may need to be reconceived – less perhaps in the sense of expropriation, and more in terms of widening access to productive assets and social wealth. Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here.
The Guardian
24-07-2025
- Business
- The Guardian
The Guardian view on global inequality: the rising tide that leaves most boats behind
This year's global wealth report by the City bank UBS confirms what is self-evident but rarely confronted: while riches are accumulating, their distribution remains starkly unbalanced. In the 56 countries and economic areas surveyed, the report says global personal wealth grew 4.6% in 2024. However, not all boats have been lifted by this tide. The gap is growing between those who hold assets and those who don't. The figures are shocking: just 60m of the world's adults – 1.6% of the population – have net personal wealth of $226tn, or 48.1% of all the world's riches. At the other extreme, four in 10 adults – 1.57bn people – have only $2.7tn, or just 0.6% of all the world's personal wealth. Economists now argue that inequality is no longer a by-product of growth but a condition of it. In the US, soaring bond markets and tech stocks have benefited the ultra-rich and deepened inequality. Nine households, it was reported, control 15% of wealth in Silicon Valley. By contrast, UBS says British median wealth rose while average wealth fell. This is a rare divergence, probably caused by prosperous households in London taking a hit from interest rate hikes as house prices dropped and debt costs rose. This wasn't a sign of shared prosperity but of paper losses at the top, while ordinary workers held steady. Unlike wages, wealth reflects not just income but also access to assets, favourable institutional conditions – such as low interest rates – and public policies like low taxes and housing shortages. In other words, wealth depends on political choices in ways that income currently does not. It's not just the inequality itself that is the issue but the erosion of mechanisms that once constrained it. As the report notes, wealth and income inequality are linked. But where wages have stagnated and collective bargaining has weakened, capital income – derived from profits, rents and interest – has been boosted by design. Productivity gains, once expected to feed through to broader living standards, now primarily serve to enhance returns to wealth. Taxes on wealth are necessary to make societies more equal. Unfairness is aiding far-right autocrats whose rise brings the risk of democratic collapse. In July seven Nobel laureates issued a powerful call for a minimum tax on the ultra-rich. Brazil, Spain and South Africa have demanded a global tax on the super-rich, placing the issue on the G20 agenda. Pioneering work by economists such as Gabriel Zucman and Emmanuel Saez led to the French national assembly passing a law this year for a 2% minimum tax on wealth over €100m. The legislation, regrettably, has not proceeded past the senate. Progressive taxation is necessary, but it doesn't address a core problem in many economies: when capital income outpaces labour income, redistribution may ease the symptoms of neoliberalism, but it leaves the underlying condition untreated. High inequality suppresses consumption, deters investment and slows growth. The gap between rich and poor is not just unfair – it's economically unsustainable. Without strong domestic demand, economies increasingly rely on debt, speculation and asset bubbles to fuel growth. Changing this would take more than fiscal transfers. It would require policies that boost wages: full employment, stronger labour unions and public investment. Private ownership itself may need to be reconceived – less perhaps in the sense of expropriation, and more in terms of widening access to productive assets and social wealth.
Mint
22-07-2025
- Business
- Mint
A Wealth Tax Wont Solve Britains Fiscal Problems
(Bloomberg Opinion) -- The finding by British lawmakers that His Majesty's Revenue and Customs doesn't know how much tax the country's billionaires pay has done little to enhance the UK collection agency's prestige. A side effect of the report by Parliament's Public Accounts Committee may be to stoke support for a more radical method of ensuring that society's richest pay their fair share – namely, a wealth tax. Wealth taxes have a patchy record of success and have been abandoned by most countries that tried them. France is the most recent example, dropping its levy in favor of a real estate tax in 2018. Only four of the 38 countries in the OECD still impose one – Norway, Spain, Switzerland and Colombia. Yet the idea is gaining renewed global momentum, helped by the work of French economist Gabriel Zucman, whose blueprint for a 2% global minimum tax on billionaires was endorsed by the G-20 under Brazil's presidency last year. In the UK, former Labour Party leader Neil Kinnock proposed a 2% tax on assets valued at more than £10 million ($13 million) earlier this month, saying it would bring in as much as £11 billion a year. The Labour government of Keir Starmer, which is facing a fiscal shortfall of as much as £30 billion this year, has declined to rule out the idea, while groups including Unite, the country's largest trade union, have backed the plan. Patriotic Millionaires UK, a group that advocates for the wealthy to pay higher taxes, said last month that a survey showed 80% of the country's millionaires support the proposal. These concurrent events formed a suggestive backdrop for the cross-party committee's inquiry into whether Britain is collecting the right tax from its wealthiest individuals. HMRC might count itself a little unfortunate with the report's framing. It can point to successes: In 2023-2024, its compliance work brought in an additional £5.2 billion of revenue from the wealthy — which it defines as those with incomes of £200,000 or assets of at least £2 million in any of the previous three years — up from £2.2 billion in 2019-2020. The committee said the agency deserved 'great credit' for this, before immediately noting that its success meant either that non-compliance among the wealthy had got worse or that HMRC's previous estimates of the extent of avoidance were too low. Sometimes, you can't win. HMRC is hardly a laggard in efficiency, scoring well in international comparisons. It has brought down the UK's estimated tax gap – the difference between what should be paid and what is actually paid – by close to a third in the past two decades. The tax authority might question why the rich are getting so much attention when they're nowhere near the biggest evaders — that would be small businesses. And it has a defense to its lack of knowledge on what billionaires pay: As officials pointed out to the committee, it has no reason to collate this data because people aren't taxed on the basis of their wealth but on their income and gains. Then again, other tax authorities often do collect this information even when they don't levy a wealth tax. And HMRC's estimate of the tax gap may be wrong — even wildly wrong. That looks highly likely in the case of the £849 billion that British residents hold in offshore accounts. The authority's (partial) estimate of tax evasion on that pot is a mere £300 million — described as 'implausibly low' by the committee. Either way, the criticism of HMRC — by a cross-party committee with a Conservative chair — looks helpful to those who would like Britain to take a more robust approach to taxing the country's most affluent individuals. The social justice case for a wealth tax is compelling. Inequality has widened since the 2008 global financial crisis as monetary easing and government stimulus inflated asset values while average incomes in many countries stagnated. Making the richest pay a percentage of their wealth would go some way to redress the balance and repair national finances weakened by the extraordinary support extended during the pandemic. Global sentiment appears to be moving in this direction. Brazil and Spain announced the creation of a coalition of the willing to work on the topic in Seville at the start of this month, and have been joined by South Africa and Spain, Zucman told me. France's National Assembly voted in favor of a minimum tax of 2% on centi-millionaires in February. The practical objections are also weighty, though. The costs of evaluating and monitoring wealth and then collecting the levies are considerable. The biggest challenge is how to prevent capital flight. A level of 2% might not seem like much; low enough to ensure that net wealth keeps growing. But look at it as a share of the income stream that those assets might produce and it's much more significant. Assume a 5% annual return and 2% of the asset base equates to a 40% additional tax on that — unless other levies are simultaneously reduced or simplified. Britain already appears to have underestimated the behavioral response to other revenue measures targeted largely at the wealthy — such as the abolition of non-dom status and the imposition of value-added tax on private school fees. There are also potentially more insidious second-order effects to consider, such as the impact on enterprise and innovation, and the fostering of a culture that looks to lean on one group of taxpayers. A wealth tax might start out with a low rate and a high cutoff point, but the temptation would be to expand it and move down the distribution. The UK had 22,000 taxpayers with at least £10 million and 626,000 with at least £2 million, according to a 2020 study by the Wealth Tax Commission, a research group. It's difficult to see how a wealth tax will work except as part of a coordinated global program. That may be the direction of travel, but it's some way away from becoming a reality. Britain's fiscal challenges are a lot more urgent. There's no immediate solution here. More from Bloomberg Opinion: This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Matthew Brooker is a Bloomberg Opinion columnist covering business and infrastructure. Formerly, he was an editor for Bloomberg News and the South China Morning Post. More stories like this are available on
Bloomberg
22-07-2025
- Business
- Bloomberg
A Wealth Tax Won't Solve Britain's Fiscal Problems
The finding by British lawmakers that His Majesty's Revenue and Customs doesn't know how much tax the country's billionaires pay has done little to enhance the UK collection agency's prestige. A side effect of the report by Parliament's Public Accounts Committee may be to stoke support for a more radical method of ensuring that society's richest pay their fair share – namely, a wealth tax. Wealth taxes have a patchy record of success and have been abandoned by most countries that tried them. France is the most recent example, dropping its levy in favor of a real estate tax in 2018. Only four of the 38 countries in the OECD still impose one – Norway, Spain, Switzerland and Colombia. Yet the idea is gaining renewed global momentum, helped by the work of French economist Gabriel Zucman, whose blueprint for a 2% global minimum tax on billionaires was endorsed by the G-20 under Brazil's presidency last year.
The Citizen
16-07-2025
- Business
- The Citizen
Call to ‘tax the rich' as global finance ministers meet in Zimbali
Working group says National Treasury should adopt measures that do not disproportionately impact working-class South Africans. The Tax Justice Working Group calls for progressive positions on international tax reform while SA hosts the G20 presidency. Picture: iStock A grouping of civil society organisations, trade unionists and activists is calling on the South African government to take action to 'tax the rich' and tackle corporate tax abuse. The South African Tax Justice Working Group is represented by organisations such as Cosatu, Oxfam, and the Institute for Economic Justice (IEJ). It made the call ahead of the G20 Finance Track meeting currently underway at the Zimbali Resort on KZN's North Coast. 'This week, as finance ministers of the G20 gather in KwaZulu-Natal, we call on the South African government to match its global commitments with bold domestic action to … stop tax abuse by multinational corporations,' it stated. The taxation of high-net-worth individuals has become a growing focus in international policy discussions. A study commissioned by the G20 and led by economist Gabriel Zucman estimates that a 2% tax on the wealth of the world's 3 000 wealthiest billionaires could generate between $200 billion (R3.6 trillion) and $250 billion (R4.5 trillion) annually. Read more Common pitfalls to avoid this tax season ALSO READ: Will South Africa's rich pay wealth tax or find ways to avoid it? The issue gained further traction at the G20 Summit in Rio de Janeiro, Brazil, in November 2024. Early in July this year, Spain and Brazil launched a joint initiative to promote higher global taxation of the ultra-wealthy. The proposal was formally introduced at the United Nations 4th International Conference on Financing for Development, held in Sevilla, Spain, and is expected to shape upcoming negotiations on international tax cooperation. 'South Africa joined the Sevilla Platform for Action [SPA] on taxing high-net-worth individuals at the conference, which signals a significant commitment to fairer taxation of the wealthy,' the tax working group notes. ALSO READ: Budget 2025: Is wealth tax coming for South Africa's rich? In a statement issued after the launch in Spain, Oxfam noted that Spain, Brazil and South Africa had taken an important step in 'forging an alliance … to show political will for taxation of the super-rich'. 'Now other countries must follow their lead and join forces,' Oxfam tax justice policy lead Susana Ruiz said, adding that COP30 in Brazil and the G20 in South Africa are key opportunities for international cooperation to tax the super-rich. ALSO READ: Many wealthy taxpayers are leaving SA due to increasingly high taxes Working group declaration The South African Tax Justice Working Group also adopted a declaration calling on government to champion progressive positions on international tax reform in its work as the G20 presidency. 'South Africa has not only the potential to play a leading role in [implementing a wealth tax], but also stands to benefit due to the reality of unprecedented inequality within this country.' It said National Treasury should take advantage of this international momentum to advance a progressive taxation agenda and work towards a wealth tax and other proposals that do not disproportionately impact working-class South Africans, unlike value-added tax (Vat) and other regressive measures. In May, shortly before tabling the third iteration of South Africa's 2025 Budget, Finance Minister Enoch Godongwana told parliament he does not support the idea of a wealth tax to address the budget shortfall, arguing that wealthy individuals in South Africa already contribute through various existing taxes. This article was republished from Moneyweb. Read the original here.
