Nisat Chowdhury
People all around the world are starting to pay more attention to the growing gap between the super-rich and everyone else.[1] The COVID-19 pandemic definitely made things worse, helping the wealthiest get even richer while leaving the rest of society behind.[2] This has sparked a lot of worry about inequality, and one idea that is picking up steam is a global wealth tax. Brazil’s G20 proposal for such a tax is gaining traction, showing that more people are supporting the idea of taxing the rich more.[3] After seeing some success with wealth taxes back home,[4] Brazil took this to the G20 summit in June 2024. The proposal suggests that billionaires should pay a minimum tax of 2% on their wealth,[5] compared to the estimated 0.3% they pay right now—way lower than what the working class has to pay.[6]
Supporters of the global wealth tax argue that an international framework is essential to prevent wealthy individuals from moving their assets to low-tax countries. So far, France, Spain, and South Africa have voiced their support for the proposal, while the United States and Germany have been opposed to a global agreement.[7] Although the G20 did not reach a consensus on the matter, discussions are expected to continue in the future as the debate over wealth taxation grows.
The global wealth tax proposal highlights a growing realization that income taxes alone are not enough to tackle the widening wealth gap we see today. The U.S. is a key player in this discussion, as nine out of the ten wealthiest billionaires in the world live there.[8] More and more Americans are feeling that the ultra-wealthy and big corporations should contribute more in taxes.[9] However, the current U.S. tax system seems to fall short in making sure that tax burdens are fairly distributed.
The U.S.’s current income tax system alone is not enough to address the growing wealth gap. Wealthy individuals often accumulate these assets, which are not taxed until they are sold, meaning they can end up paying much lower taxes despite having substantial wealth. The U.S. has yet to implement a net wealth tax, which could help address some of these imbalances out of concerns that doing so would be infeasible. But several European countries have successfully introduced them, raising the question: why has the U.S. not followed suit?
Economist Emmanuel Saez outlines three main reasons for implementing a wealth tax in the United States: (1) generating more revenue from the wealthy, (2) restoring tax progressivity, and (3) addressing the growing concentration of wealth.[10] He argues that the current tax system is regressive for the wealthiest Americans, as the top 0.01% pay a disproportionately low share of their economic income.[11] This happens because the individual income tax is based on realized income. Since billionaires can accumulate massive economic wealth without necessarily realizing much taxable income, they end up paying much lower taxes relative to their wealth.
Currently, Norway, Spain, and Switzerland are the only Organization for Economic Co-Operation and Development (OECD) countries that maintain wealth taxes.[12] Among these, Switzerland collects more revenue from its wealth tax than the others, according to an OECD report.[13] Several factors contribute to the relatively low opposition to the wealth tax from wealthy individuals in Switzerland. For one, the wealth tax has been in place since the medieval era, long before the income tax was introduced.[14] Additionally, the tax rate is relatively low—never exceeding 1 percent—and wealthy taxpayers in Switzerland are not subject to other taxes like inheritance or capital gains taxes, which U.S. taxpayers face.[15] As a result, the Swiss wealth tax faces minimal serious opposition. In comparison, America has no long-standing tradition of wealth taxation, and the proposed tax rates are substantially higher than Switzerland’s 1 percent.[16]
While a net wealth tax may seem like an appealing solution to economic inequality in the U.S., the administrative challenges of measuring wealth make implementing a federal wealth tax a complex and potentially burdensome solution. Alternative approaches, such as progressive consumption taxes and state-level wealth taxes, are worth exploring as more practical ways to address the nation’s growing economic inequality.
[1] Oxfam Canada, Why Extreme Inequality Must Be at the Top of the Agenda at Davos 2025(Jan. 15, 2025), https://www.oxfam.ca/story/why-extreme-inequality-must-be-at-the-top-of-the-agenda-at-davos-2025/; Pew Research Center, Economic Inequality Seen as Major Challenge Around the World (Jan. 9, 2025), https://www.pewresearch.org/global/2025/01/09/economic-inequality-seen-as-major-challenge-around-the-world/.
[2] Emma Rumney, Pandemic Boosts Super-Rich Share of Global Wealth, REUTERS (Dec. 7, 2021), https://www.reuters.com/business/pandemic-boosts-super-rich-share-global-wealth-2021-12-07/.
[3] See Oliphant, J. Baxter, Top Tax Frustrations for Americans: The Feeling That Some Corporations, Wealthy People Don’t Pay Their Fair Share, Pew Research Center (Apr. 7, 2023), https://www.pewresearch.org/short-reads/2023/04/07/top-tax-frustrations-for-americans-the-feeling-that-some-corporations-wealthy-people-dont-pay-fair-share/.
[4] Arkady Petrov, Brazil’s Tax Reform Yields Unprecedented Revenue from High-Net-Worth Individuals, Rio Times (Jan. 28, 2025), https://www.riotimesonline.com/brazils-tax-reform-yields-unprecedented-revenue-from-high-net-worth-individuals/#:~:text=Brazil’s%20Tax%20Reform%20Yields%20Unprecedented%20Revenue%20from%20High%2DNet%2DWorth%20Individuals&text=In%20a%20landmark%20fiscal%20move,tax%20measures%20targeting%20the%20wealthy.
[5] Global Wealth Tax Proposal at G20: Tackling Poverty and Climate Change, NPR (Aug. 6, 2024), https://www.npr.org/2024/08/06/nx-s1-5064662/global-wealth-tax-g20-poverty-climate-change.
[6] Tax Observatory, Global Tax Evasion Report 2023, Tax Observatory, 76–77 (Oct. 2023), https://www.taxobservatory.eu//www-site/uploads/2023/10/global_tax_evasion_report_24.pdf(quantifying how much tax billionaires pay by assuming that if billionaires pay around the average of the tax rate in France and U.S., i.e. 0.25%, then global billionaires pay around $44 billion of the $13 trillion they possess in wealth, amounting to 0.35% of their wealth).
[7] Supra note 5.
[8] The World’s Wealthiest in 2025: Americans Dominate the Ranks, Rio Times (Mar. 28, 2025), https://www.riotimesonline.com/the-worlds-wealthiest-in-2025-americans-dominate-the-ranks/.
[9] Oliphant, supra note 3.
[10] N. Gregory Mankiw, How to Increase Taxes on the Rich (If You Must), in Combating Inequality : Rethinking Government’s Role 133 (Olivier Blanchard, and Dani Rodrik, eds 2021).
[11] Id.
[12] Id.; see also supra note 4; Joseph Zeballos-Roig, 4 European Countries Still Have a Wealth Tax. Here’s How Much Success They’ve Each Had, Bus. Insider (Nov. 7, 2019, 8:51 AM),https://www.businessinsider.com/4-european-countries-wealth-tax-spain-norway-switzerland-belgium-2019-11 [https://perma.cc/C7WC-DKRU].
[13] Id.
[14] Id.
[15] Id.
[16] While America has historically had some form of wealth tax, such as the General Property Tax in the 19th century which taxed all property including intangible assets like stocks, the US has never implemented a net wealth tax at the federal level. See Owen Zidar, America Used to Have a Wealth Tax: The Forgotten History of the General Property Tax, Inst.on Taxation & Econ. Pol’y (July 29, 2021), https://itep.org/america-used-to-have-a-wealth-tax-the-forgotten-history-of-the-general-property-tax/.