Billionaire wealth has reached historic highs — and so has their power. UC Berkeley and Paris School of Economics Professor Gabriel Zucman, a world-renowned expert on wealth inequality and global tax evasion, warns that this growing concentration of extreme wealth is undermining democracy and allowing the ultra-rich to wield outsized influence over politics and society.
In his new book, “We Need to Tax Billionaires,” he proposes a solution: the “Zucman tax,” a 2% minimum tax on the ultra-rich that ensures billionaires pay at least a baseline share of their wealth in taxes, regardless of how they structure their income. The tax, he says, could help curb inequality and raise hundreds of billions in public revenue. He also published a recent op-ed in The New York Times with Berkeley Economist Emmanuel Saez, which argues why voters should pass the innovative ballot measure.
Zucman is a summer research professor for Berkeley’s Economics Department, where he joined the faculty in 2015, and serves as the summer school director of the James M. and Cathleen D. Stone Center on Wealth and Income Inequality. His research focuses on the accumulation, distribution and taxation of global wealth.
As a central figure in France's recent fiscal reform debates and a leading voice advising European policymakers on wealth taxation, Zucman has increasingly focused on how these economic principles apply globally. Berkeley Social Sciences spoke with Zucman about how his proposed tax would work in practice, and what its adoption could mean for the future of democracy and inequality. This interview has been edited for length and clarity.
What makes studying how the ultra-rich are taxed an important lens for understanding inequality?
Gabriel Zucman: The rise in extreme wealth has been perhaps the most striking development in the U.S. and world economy over the last decades. In the early 1980s, the 400 wealthiest Americans owned in wealth the equivalent of 2% of U.S. Gross Domestic Product (GDP); now they own more than 20%. With the upsurge of their wealth has come an explosion of their power, including the power to buy elections, influence policymaking, shape the prevailing ideology through the media they own and tilt markets by buying competitors.
Of course the rise of inequality is a broader phenomenon; it’s not just the billionaires who have seen their wealth explode. But when it comes to the importance for democracy and society at large, the rise of extreme wealth has been particularly consequential. In the 2000 federal election cycle, billionaires (around 0.0005% of the US population) accounted for 1% of total campaign spending, in 2024 they accounted for 19% — and 33% of all donations to the Trump campaign. Everything that is downstream of the political system — including the courts, regulatory power, economic policy, media independence and so on — is affected by the surge of billionaire influence.
Can you share more about how your 2% "Zucman tax" would work in practice, and why it's a more effective solution than existing approaches?
Gabriel Zucman: This proposal was born out of the analysis of the history of wealth taxation (especially in Europe), which by and large was a failure. There are two ways to look at that failure: one can say “wealth taxes have been tried in the past, they failed, hence they will always fail.” Or one can try to understand the mistakes that were made, and think about how they could be addressed. This is the approach I’ve followed.
Past wealth taxes in Europe largely exempted the super-rich because they did not tax large shareholding, or when they did, they taxed them for only a fraction of their true value. My proposal takes the opposite approach: it is squarely focused on the ultra-wealthy (those with more than $100 million in wealth), but with no loophole of exemption. Fundamentally, it creates a new principle: that extreme wealth has to come with unavoidable duties toward society. It seems obvious that there should be a minimum amount of personal tax owed when you’re rich, yet this principle does not exist in our laws today.
This minimum, to be effective, must be expressed as a fraction not of income — which is easy to manipulate — but of wealth. Hence the proposal for a minimum tax on the super-rich equal to 2% of their wealth. Someone who would already pay the equivalent of 2% or more of their wealth in personal tax would have nothing more to pay, but a billionaire who pays less than 2% would have to pay the difference to reach the 2% minimum.
Why do you think now is the right moment politically and economically to implement a tax on billionaires?
Gabriel Zucman: There is always a tension in democratic societies between the concentration of wealth and the very possibility of a well-functioning democracy. Wealth concentration corrodes democracy. All the thinkers of democracy, from Aristotle to the Founding Fathers to contemporary scholars like Albanian scholar Lea Ypi, have highlighted this fundamental issue. But from the post-World War II era to the beginning of the 21st century, it seemed for a brief period of time that this issue belonged to the past: extreme wealth seemed to have disappeared, wealth concentration was at a historically low-water mark. Today it’s back, and the fight between oligarchy and democracy is shaping up to be the defining battle of the 21st century.
If the Zucman tax were adopted, what would its success look like in five to 10 years?
Gabriel Zucman: First, if done well, it would generate a lot of tax revenue — more than $400 billion in global tax revenue annually, about 0.4% of world GDP. This is more than all the money currently spent on international organizations and international development aid.
Second, I hope it would encourage countries to create more progressive wealth taxes. I view the 2% minimum wealth tax as an irreducible floor, but certainly not a ceiling. Two percent is the rate that would ensure that billionaires would pay as much tax — all taxes included — as the middle class, relative to their income. Favoring less than 2% would mean accepting that billionaires have a “right” to pay less than the rest of the population; this violates our most fundamental principles of equality before the law. Indeed, polls show that more than 80% of the population agrees that billionaires should not be allowed to pay less.
But of course there are many good reasons for wanting billionaires to pay more than the middle class — which means rates of more than 2% on their wealth. It will be easier to achieve the desired level of tax progressivity once a solid and consensual foundation is in place.
What surprised you most in the process of researching and writing this book?
Gabriel Zucman: In 2019 we produced, with Professor Saez, the first estimates of the effective tax rates of billionaires in the U.S. This kickstarted an international research effort: in the years that followed, researchers in different countries produced estimates for France, the Netherlands, Sweden, Norway, Brazil, etc. We now have evidence from about 10 countries.
One surprising result that came out of all this is that European countries do even worse than the U.S. when it comes to taxing billionaires. In the European Union (EU), the effective income tax rate of billionaires is often close to 0%! They use holding companies to avoid reporting any sizable amount of taxable income, a form of tax avoidance which has not been possible in the U.S. since the 1930s. This is not to say that U.S. billionaires pay a lot of tax — they don’t — but it’s striking that European ones pay even less. In the book, I describe this very recent international research effort and its main — and often surprising — findings.
