The problem with taxing the rich

When Forbes first published its global billionaires list in 1987, it included just 140 names. By 2025, that number had grown to over 3,000 people with a combined wealth of $16 trillion. Elon Musk alone was estimated at $342 billion, more than the entire 1987 group combined.

Economist Gabriel Zucman notes that the wealth of the top 0.0001% has risen by over 7% a year since 1987, far outpacing average income growth. Yet the super-rich often pay lower effective tax rates than ordinary workers. Zucman argues they should be a global priority for taxation, proposing a 2% worldwide levy on billionaires’ assets.

Governments, however, face challenges. Many countries abandoned wealth taxes after finding they raised little revenue and drove wealthy residents elsewhere. Spain, Norway, and Switzerland are rare exceptions, but even they face political debates over keeping such taxes. Meanwhile, nations like the UAE and Italy lure the rich with favorable regimes, and the US under Donald Trump introduced a $5 million “golden visa” scheme.

Critics warn this “race to the bottom” risks creating a detached global elite. Supporters of higher taxes say it is unfair to cut social services while leaving vast fortunes untouched. Still, defining, valuing, and enforcing wealth taxes remains difficult, and the rich have both the means and the mobility to resist them.

Some experts suggest reforming existing taxes on property, gifts, and inheritances rather than creating new wealth taxes. But with aging populations, rising welfare costs, and slow economic growth, pressure to tax extreme wealth is unlikely to fade. As one former OECD official put it, future generations may look back and say: “A few individuals owned the world, and that was wrong.”

For more information see Emma Agyemang, “The problem with taxing the rich,” Financial Times, September 16, 2025.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.