by The tax debates currently underway in France and the discussions which took place at the 2024 G20 summit demonstrate that the issue of tax justice and the taxation of billionaires is not about to disappear from the public debate. There’s a simple reason for this: the sums amassed by the world’s wealthiest individuals over the last few decades are quite simply gigantic. Those who consider this a secondary or symbolic issue should take a look at the numbers. In France, the combined wealth of the 500 largest fortunes has grown by €1 trillion since 2010, rising from €200 billion to €1.2 trillion. In other words, all it would take is a one-time tax of 10% on this €1 trillion increase to bring in €100 billion, which is equal to all of the budget cuts the government is planning for the next
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Finally, and most importantly, this defeatist rhetoric overlooks the fact that governments still have room to maneuver, including the ability to act independently. For example, when the US threatened to withdraw Swiss bank licenses, Bern put an end to its banking secrecy. Similarly, across the Atlantic in the US, taxpayers are taxed according to their nationality, even if they live abroad. If someone wants to give up their US passport, an option not without risk, there’s nothing to prevent the government from continuing to tax them, as long as their wealth was accumulated in the US or even more simply, if they continue to use the dollar.
France is a smaller country, but it also has considerable leverage. France, for example, could impose an exceptional wealth tax based on the number of years spent in France. A taxpayer who has been resident in Switzerland for one year after spending 50 years in France would, for example, continue to pay 50/51th of the tax required by a French resident. Those who refuse to pay would be outlawed and could face legal penalties.
The final argument against taxing billionaires is that it would be illegal or unconstitutional. This is nothing new: throughout history, the powerful have often invoked legal language to preserve their privileges. However, there is nothing in the Constitution that prevents the implementation of an exceptional tax on the wealth of billionaires, or more generally, wealth taxation, which is a valid indicator of citizens’ ability to pay taxes just as much as income. In fact, this is why a comprehensive system of inheritance and property taxes was established in 1789, and why an exceptional wealth tax was introduced in 1945. The fact that some constitutional judges ignore this and sometimes try to use their position to impose their partisan preferences doesn’t change a thing: this is fundamentally a political debate, not a legal one.
Other solutions are possible, such as Prime Minister Michel Barnier’s tax on incomes over €500,000. However, this tax will bring in €2 billion compared to the €100 billion that could be raised from a 10% tax on the wealth of billionaires. The reason for this disparity is that billionaires’ income constitutes only a tiny fraction of their overall wealth, meaning they would effectively pay very little under the Barnier tax. Consequently, it is the most modest who will bear the brunt of the Barnier budget and the cuts to public services. This strategy leads us straight to the wall: we can’t effectively address today’s social and climate challenges if we don’t start by taxing the wealthiest in a clear and significant way.