The billionaire tax proposal almost three years on – Why we are not moving towards a global minimum standard for the taxation of ultra-wealthy individuals

Political context and reception of the proposal

Zucman’s proposal for a ‘billionaire tax’ emerged amid renewed international debate on economic inequality and tax justice, fuelled by growing concerns about the concentration of wealth and the ability of ultra-wealthy individuals to reduce their tax burden. In February 2024, for instance, Oxfam reported that the share of pre-tax income accruing to the richest 1% across G20 countries had increased from 11% in 1980 to 16% in 2022, while average top marginal personal income tax rates had fallen from approximately 60% to 40% over the same period. These issues featured prominently in Brazil’s G20 presidency agenda, which sought to strengthen international tax cooperation and explore ways of ensuring the fair and effective taxation of ultra-wealthy individuals.

The billionaire tax proposal was met with support from several countries, including France, Spain, Colombia, and Belgium, as well as the African Union. However, this did not translate into a collective commitment to implement the standard. The G20 Ministerial Declaration on International Tax Cooperation of July 2024 acknowledged Zucman’s proposal, but stopped short of endorsing the proposed 2% minimum tax, instead committing members to further cooperation through the exchange of best practices and the development of anti-avoidance mechanisms.

Recent country experiences 

The debate surrounding the billionaire tax proposal brought longstanding questions about the practical application of wealth taxes back into focus. 

In the US, the Bidem administration’s 2022 proposal for a 25% minimum tax on the income of households with a net wealth exceeding USD 100 million was never enacted. Related bills introduced in Congress also failed to progress beyond committee referral. 

Similarly, in France, a proposal inspired by Zucman’s blueprint advanced through the legislative process, but ultimately failed to become law. The bill sought to impose a minimum tax equivalent to 2% of net wealth on individuals owning assets exceeding EUR 100 million. The tax would apply where the combined amount of certain existing taxes, including personal income tax and the real estate wealth tax, fell below this threshold. The French National Assembly adopted the proposal in February 2025, but the Senate subsequently rejected it. Opposition chiefly centred on concerns about potential effects on investment and entrepreneurship and the risk of wealthy individuals relocating abroad. Critics also questioned whether a tax based on wealth, without a cap linked to the taxpayer’s income, could be compatible with the principle of taxation in accordance with ability to pay.

The Netherlands also examined the potential introduction of Zucman’s proposed minimum standard in 2026. The discussion highlighted the difficulty of reconciling a tax based on net wealth with existing rules governing the taxation of corporate profits and personal income. For example, profits retained within holding companies can contribute to an individual’s net wealth without triggering an immediate personal tax liability. Under Zucman’s proposal, however, shareholders whose effective tax burden falls below 2% of their net wealth would face an additional tax liability, even where low personal taxation partly reflects the timing of taxation under existing rules.

Still at a standstill 

Despite the recent resurgence of international interest in wealth taxation, the arguments advanced against this measure remain largely unchanged from those that have historically shaped this debate. While relevant, these objections warrant some scrutiny. With regard to capital flight, wealth taxes may influence migration decisions, but this was not found to translate into substantial effects on aggregate economic activity. The argument that wealth taxation discourages entrepreneurship is also not entirely convincing. Since tax would apply only once substantial wealth had already been accumulated, it is unclear whether the prospect of future taxation would significantly affect entrepreneurial incentives. Similarly, although the interaction with existing taxes is complex, it need not be an impossible obstacle, as the main challenge lies in determining how different tax liabilities should be accounted for when determining whether an individual meets the minimum standard.

The fact that ultra-wealthy individuals can hold assets in multiple jurisdictions and relocate their tax residence makes international coordination a central challenge. Without similar measures across jurisdictions, countries may be reluctant to introduce a minimum tax for fear that wealthy individuals will move to jurisdictions where their wealth faces a lower tax burden. Importantly, the incentives to overcome this issue through coordination are not necessarily shared equally. As ultra-wealthy individuals are relatively few in number and geographically concentrated, the fiscal benefits of a common minimum standard may be more significant for some countries than for others. 

On the flip side, the strong public support for the taxation of the ultra-wealthy is mainly rooted in concerns about inequality and dissatisfaction with existing institutional arrangements that enable it to emerge and deepen. The concentration of extreme wealth is equally a distributional outcome and a reflection of the underlying structures through which economic advantages are generated and reproduced. This also raises a broader question about the extent to which the concentration of wealth can be justified. The limitarian perspective addresses this by challenging the idea that individual wealth accumulation can be understood solely in terms of personal effort and achievement, given its dependence on public institutions, collective knowledge, and the contribution of others. However, the normative case for limiting extreme wealth does not, in itself, establish that taxation is the most appropriate instrument to achieve this goal, particularly if the objective is to address the structural conditions that sustain inequality. 

Perhaps a more fundamental reason why the debate around the billionaire tax proposal remains at a standstill is that wealth taxation continues to be approached primarily as a corrective instrument: a means of ensuring that the wealthiest individuals contribute more in tax. Yet, the relatively low effective tax burdens of ultra-wealthy individuals expose broader shortcomings in existing tax systems, including the treatment of capital gains, the distinction between income and accumulated wealth, and the interaction between corporate and personal taxation. A minimum tax on wealth could address part of this problem by ensuring that the tax burden of the ultra-wealthy does not depend exclusively on the income generated by their assets or on the realisation of capital gains. However, this would not resolve the broader questions of how wealth accumulates over time or how the institutional arrangements that shape its distribution should be addressed. In this sense, while wealth taxation offers a relatively direct response to concerns about inequality, it cannot substitute a broader debate about the relationship between the tax system, wealth accumulation, and the distribution of economic resources.