Any taxes that governments might dare to levy on the wealth of the wealthy, the lackeys of our deepest pockets insist at every opportunity, would leave our richest with no choice but to pick up their marbles and move to some rich people-friendly locale that at tax time gives due deference to grand fortunes.
This case against taxing grand fortune may be beginning to wear a little thin. The current Spanish government actually now has in place a new tax on concentrated wealth. Spaniards with net worths over 3 million euros, the equivalent of about $2.9 million, faced last year and will face again this year a temporary wealth tax.
This new levy ranges from a tax rate of 1.7 percent on private fortune between $2.9 million and $4.8 million to a 3.5 percent tax rate on stashes of wealth over $9.6 million. Proceeds from this new “solidarity” tax, Spanish finance minister María Jesús Montero has announced, will help “guarantee social justice and economic efficiency.”
“Those who have more,” as Spanish prime minister Pedro Sánchez likes to put it, “should contribute more.”
And if all our planet’s astonishingly well-endowed have-mores did pay more, how much in new revenue would the world have available for improving the lives of our non-super rich?
The UK-based Tax Justice Network has taken a crack at an answer. The Network’s researchers have just released a report that estimates how much Spanish-style wealth taxes, if adopted worldwide, could annually raise. That total turns out to be rather significant.
The world’s nations, the Tax Justice Network calculates, could raise $2.1 trillion a year “by following the example of Spain’s successful wealth tax” on their own richest 0.5 percent.
How could so much be raised from so few? The top 0.5 percent, the new Tax Justice Network analysis details, hold a wildly disproportionate share of the world’s wealth. On average, the bottom 50 percent of national adult populations hold just 3 percent of national wealth. The share of national wealth that goes to the top 0.5 percent? That averages out to 25.7 percent.
In the United States, according to the World Inequality Database, the top 0.5 percent of the adult population holds an average fortune of $29.3 million. Entering the top 0.5 percent takes a fortune worth almost $8.6 million.
The United States also currently hosts nine of the ten richest men on the planet, with Elon Musk sitting on top of that list. His personal fortune is hovering near to a quarter-trillion dollars.
The Tax Justice Network’s Mark Bou Mansour may have the most vivid take on that stunning stat.
“The average U.S. worker,” he points out, “would have to work for a stretch of time 13 times longer than humans have existed to earn as much as wealth as the world’s richest man has today.”
We won’t eliminate, to be sure, that outrageous gap with a wealth tax as modest as Spain has placed on the world’s policy-making table. But kudos to Spain anyway. We have to start somewhere.
And kudos to the folks at the Tax Justice Network as well. They’ve combined their ace number-crunching with a clever and colorful new step-by-step guide on how to tax the super rich. Take a look. We can do this!
