Gabriel Zucman: “We need to protect democracy from the rise of extreme wealth” | Economy | EUROtoday

At solely 39 years outdated, the French economist Gabriel Zucman (Paris, 1986) has turn into a reference for the world’s progressive left and the nemesis of a part of the ultra-rich. Famous for his research on tax evasion and avoidance by multinationals and mega-millionaires, his proposal to create a minimal tax of two% on fortunes of greater than 100 million euros, generally known as Zucman feewas about to be accredited in its native nation. “The Senate blocked it, but it is not going to disappear,” he mentioned throughout an interview on the Moncloa Palace held this Friday, after the signing of a memorandum with the Government to collaborate in analysis on tips on how to enhance tax techniques. “Billionaires should not be allowed to pay less [impuestos] than the rest; “It is a violation of our most basic principles of equality before the law,” says the director of the International Tax Observatory, before listing the initiatives and interest that this debate is generating around the world. “We are already facing a turning point,” he says.

Ask. When will there be a Zucman tax in Spain?

Answer. As soon as possible. All countries need this new principle. It is not a technical or fiscal issue. They are unavoidable duties towards society. A minimum tax on the super-rich is important and urgent for three reasons. The first is fairness: they should not be allowed to pay less than everyone else; It is a violation of our most basic principles of equality before the law. Secondly, the taxes that the super-rich do not pay end up being paid by the rest of the population. And the third and most important is the democratic emergency. With the rise of extreme wealth, the power of billionaires has skyrocketed. This always generates tension with democracy, with dramatic consequences for the population. We are seeing it in the United States. It would be a mistake to think that it cannot happen here. With this rise of extreme wealth, we need to create new principles, policies and institutions to protect democracy.

P. Can Spain lead this initiative? Has the Government committed to approving the tax?

R. Spain is already a reference. He is leading the start of a coalition of countries that have agreed to work together to promote this minimum tax. The debate began in 2024, when Brazil presided over the G-20. After Trump’s re-election, the possibilities of progress in that forum have been diminished. It is now crucial to act at the national level. Progress is not achieved through large international agreements, but when a country leads by example and begins to implement it.

P. Is one country enough?

R. Yes. The fear that is always stirred is that the billionaires will leave the country, and that therefore it is necessary to apply the tax in a coordinated manner at a global level. It isn’t true. Any country can combine the tax with a shield against flight: if the super-rich move abroad, they will remain subject to the minimum tax for five, ten, fifteen years…

P. What is missing for us to have that tax?

R. Nothing. All the ingredients are there. The first and most important is the overwhelming popular support. Secondly, there is a proposal, the feasibility and practicality of which I think everyone understands, and there is an urgency to do something. He the state in which It is very difficult to defend. Now it is a matter of political will to make it a reality.

P. Is only political will needed or are there actors blocking change?

R. These changes always take time. The discussion began internationally in 2024 and in Spain, at the national level, very recently, with Sumar. It’s not a matter of days or weeks. It is about expanding the reach of democracy, about bringing the super-rich into the realm of national solidarity. We will get there, and perhaps it will be relatively soon, given how quickly the debate is evolving. In California, signatures are being collected to create a flat 5% tax on billionaires. It would be the first in the world. The French National Assembly was the first parliament to approve, just a year ago, the 2% minimum tax. The Senate blocked it, but it’s not going away. We are facing a turning point. I believe that the years 2025 and 2026 will be seen as the beginning of a new international movement, the beginning of a change of trend.

P. Why couldn’t it be approved in France?

A. First of all, because of the political situation: the Senate is dominated by conservative parties. Furthermore, the richest used all their weapons to spread fear, mainly through the media they own and control. They said “we pay zero and we want to stay that way,” claiming that some other determine would destroy the economic system. All of this slows down the method, however can’t cease it. France is in a really critical finances scenario. It will now not be attainable to ask everybody else to pay extra taxes or see their healthcare reduce whereas the ultra-rich are untouchable, now that it has turn into clear that they pay virtually no revenue tax. It isn’t sustainable. It will come to an finish, both within the 2026 finances debate or after the 2027 presidential election.

P. How did it get to the purpose the place the super-rich pay virtually no taxes?

R. It’s in all probability all the time been like this. Through in depth worldwide analysis we have now found that revenue tax has persistently didn’t successfully tax the super-rich. It could be very straightforward for them to keep away from this by structuring the property in such a manner that it generates little or no taxable revenue. The wealth tax, the place it exists, reminiscent of in Spain, has additionally failed, as a result of it has all the time had exemptions for enterprise belongings, which represent virtually the entire wealth of the super-rich. That is why we’d like a minimal ground. Billionaires who already pay an honest quantity—if the sum of private revenue tax and belongings already equals at the very least 2% of their whole wealth—won’t should pay something extra with my proposal.

P. Spain already has a regional and a state tax on wealth. What would occur to them?

R. They would keep and the brand new one could be complementary. An further contribution would solely be requested from billionaires who pay lower than that 2%. It isn’t an additional tax, however a safeguard.

P. How a lot could be raised?

R. In Spain, it could generate about 5,000 million yearly in further revenue. It might be a conservative estimate, which must be refined. Just in the present day [por el viernes] We have launched a collaboration with the Treasury to shed extra gentle on precisely how a lot income is at stake. It is a blind spot of public statistics in all international locations, which stay silent in regards to the wealth of the super-rich, their revenue and their tax funds, regardless of their significance. That is why we have now been in a position, working with tax administrations in virtually 10 international locations up to now, to dispel this opacity. We hope to do it now additionally in Spain.

P. One of the nice causes of inequality in Spain is housing.

R. The housing entry disaster is a part of the broader downside of the skyrocketing price of dwelling, and a part of the answer is to ask for extra from those that have probably the most and pay inadequate taxes. This may cut back taxes on the center class or make investments extra in public companies: housing, schooling, well being, infrastructure.

P. 10% of the world’s inhabitants has 75% of the wealth. Would taxing the richest extra cut back this huge inequality?

R. I wish to be clear: the minimal tax alone isn’t going to be sufficient to scale back the focus of wealth. It isn’t the definitive answer to the rise in inequality. Billionaires’ wealth is rising so quick (10% per yr on common) that even with a 2% tax, their wealth would nonetheless improve by 8% per yr on common, a lot quicker than the common wealth progress fee of the common particular person.

Therefore, it’s not sufficient, however it’s obligatory. And it’s in a broad sense: we’d like a brand new worldwide motion through which we work collectively—Spain, Brazil, France, South Africa, and so on.—to rewrite the foundations of the financial recreation in a manner that protects democracy, staff and the surroundings. This initiative is the embryo of what may very well be a brand new internationalism, different to the imaginative and prescient about trump based mostly on coercion, the preeminence of wealth and plutocratic seize of governments.

P. It appears that the world is transferring in the direction of the intense proper. Will it cease the method?

R. We return to the assorted initiatives which are rising in Brazil, California, France, Belgium, Spain, the United Kingdom… If we transfer ahead on this subject, it’s going to cut back the enchantment of far-right actions, which thrive on the concept governments are powerless to train any form of authority over probably the most highly effective financial actors. It is essential to exhibit that governments have the ability to exert authority over billionaires and that we will make concrete progress towards better financial justice. Then a spread of prospects will open up and religion will likely be restored to many individuals. If we will do it with billionaires, we will do it with multinationals and rewrite the foundations of worldwide commerce.

P. Mention multinationals. The OECD minimal tax has been decaffeinated. Have we returned to sq. one?

R. Unfortunately, it has been drastically weakened. Many loopholes had been launched and, extra just lately, the United States has been exempted from the widespread guidelines. But we have now not returned to the start line. Now we all know what we will put on, which is a part of the realm of the attainable. The matter will come again and we’ll do higher subsequent time.

P. He has turn into a reference for the left. Have you considered coming into politics?

R. I like what I achieve this a lot: analysis, information college students, have the liberty to work on the matters that curiosity me, develop the observatory… This work has affect and sure essential repercussions. I’m very joyful.