Another $250B going toward the greater good every year? Sounds nice, but it ain’t happening

Every so often, this wild idea floats to the surface of the economic discourse: What if we got the planet’s richest people to pay just a wee bit of tax on their enormous piles of wealth?

• This message fueled the popularity of Bernie Sanders, who doesn’t believe billionaires should even be a thing.

That pesky idea is back again

This time, it’s the EU Tax Observatory, a network of independent European economists, banging that drum, per Bloomberg.

The organization’s research found billionaires carry effective tax rates of 0%-0.5% today.

• At that rate, the world’s 2.75k billionaires contribute just ~$44B to government coffers every year.

The economists ran more numbers: What if that wealth got taxed at a 2% rate? (That’s way less than us idiots who don’t hide our money offshore or in holding companies, but still an improvement).

• Their eyebrow-raising results: The increased taxation would yield an additional $214B per year.

Experts are now using those numbers to sound the alarm:

• The EU Tax Observatory’s report also included recommendations for “tax justice” to improve the “social sustainability of globalization.”
• Nobel Prize-winning economist Joseph Stiglitz joined their call for a global minimum tax on billionaires.

OK, but would this ever actually happen?

Eighty-one billionaires control 50%+ of the world’s wealth while 648m people live in extreme poverty, so imagining a world with $250B+ available annually for redistribution and reinvestment can be an enticing thought.

But don’t hold your breath.

As a reminder of how this stuff usually works, just look at 2021, when a landmark agreement between 136 countries set a 15% minimum tax rate for large multinational corporations.

What a win, right? Sure, except for all the loopholes that have chopped payments down to ~5%.

Bottom line: The rich always win, except maybe in Snowpiercer — which is fitting because building a functional, self-sustaining circumnavigational train feels about as likely as cajoling the uber-wealthy into paying a fair share.