As inequality persists at extreme levels worldwide, we are excited to welcome Gabriel Zucman as Zeteo’s newest contributor.
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we → persist → contributor
Gabriel, who teaches at Berkeley, is one of the leading economists and researchers on wealth inequality, taxation, and tax avoidance.
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who → teach → inequality
His latest book, ‘We Need To Tax Billionaires,’ presents one of the clearest and most accessible arguments for a wealth tax I’ve read.
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I → need → tax
Sometimes what is right in front of us is the last thing we see.
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we → see → us
For more than 15 years, I have studied the world’s wealthiest people and analyzed the tactics they use, from Luxembourg to the British Virgin Islands, to eschew taxation.
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they → study → taxation
At the age of 21, I was poring over Swiss bank archives and dissecting international balances of payments to determine how much money was hidden in offshore tax havens.
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money → pore → havens
When this historically obscure issue was brought to light in the Panama Papers in the mid-2010s, it finally started making headlines.
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it → bring → headlines
I then turned my attention to multinational corporations and their financial records.
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I → turn → corporations
I found these entities’ Byzantine accounting methods fascinating.
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methods → find → ?
I now knew that profits made in France or Germany were ending up in Singapore or Bermuda, at a staggering cost to society.
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profits → know → society
This kind of global tax evasion has been one of the linchpins of rising inequality and growing government debt worldwide.
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kind → rise → inequality
It has also led many to lose hope in the very possibility of a fairer society, creating a breeding ground for the reactionary political movements that are thriving today.
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that → lead → movements
But the real battleground, it turns out, is not in Switzerland or in the Cayman Islands.
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it → turn → Islands
It is not in some faraway alpine hideaway or island enclave that our fundamental principles of justice are trickling away, but right here in the United Kingdom, in France, in the United States, and in other countries where most of the ultra-wealthy live.
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most → trickle → wealthy
By funneling their income into holding companies – most often located on our shores – those at the very top of the wealth distribution chain pay virtually no income tax.
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those → funnel → tax
The end game defies all logic.
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game → defy → logic
If all France’s billionaires were to flee to the Cayman Islands tomorrow, the loss of tax revenue to the country would be insignificant: around 0.03%.
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loss → flee → country
And the same is true throughout Europe, and indeed globally: the super-rich have not yet entered the realm of national solidarity.
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rich → enter → solidarity
It is time to finish what we started with income tax – a major advance for democracy– in the late 19th and early 20th centuries.
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we → finish → centuries
It is time finally to bring billionaires, who have never really been subject to income tax, into the fold.
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who → bring → fold
Carrying this unfinished revolution to completion is imperative if we wish to live by our most fundamental principles of equality before the law.
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we → carry → law
This is why I am advocating for a wealth tax on ultra-high-net-worth individuals.
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I → advocate → individuals
The battle is likely to be difficult, but I believe it is one worth fighting.
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it → believe → ?
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In a sense, it is not all that surprising that it has taken so long for a clear picture of billionaires’ small contributions to national tax revenue to emerge.
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picture → take → revenue
Statistical institutes produce little or no information on their countries’ largest fortunes.
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institutes → produce → fortunes
The press – magazines like Challenges in France, The Sunday Times in the UK and Forbes in the U.S. – have been attempting to fill this information gap by investigating publicly available documents such as corporate financial statements and disclosures to financial market authorities.
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press → attempt → authorities
Using these sources, they come up with estimates of billionaires’ net worth.
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they → use → worth
But what their reporting hasn’t told us is how much tax billionaires pay.
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billionaires → tell → tax
This information has remained shrouded in secrecy.
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information → remain → secrecy
It was not until the 2020s that an international academic research project began to lift the veil.
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project → begin → veil
In 2019, my Berkeley colleague Emmanuel Saez and I attempted to estimate U.S. billionaires’ effective tax rates.
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colleague → attempt → rates
The data was incomplete, so our findings could not be considered definitive at the time, but the results were later confirmed.
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results → consider → time
In the meantime, other researchers took notice.
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researchers → take → notice
A body of work began to grow in countries including France, Brazil, the Nordic countries, the Netherlands, and Italy.
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body → begin → France
None of this would have been possible without a major development: the possibility for researchers, working in partnership with tax administrations, to access the holy grail – the tax returns of the super-rich and of the companies they own.
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they → work → companies
As researchers, we stand on the shoulders of giants.
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we → stand → giants
The collaborative and cumulative effort to shed light on taxation began nearly a century ago with the work of economists Gerhard Colm and Helen Tarasov.
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effort → shed → Colm
In the United States in the 1940s, they were the first to attempt to answer a seemingly simple question: Who pays taxes?
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Who → attempt → taxes
Their research aimed to establish the distribution of the tax burden across different income brackets.
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research → aim → brackets
In today’s high-income democracies, where between 30% and 50% of national income goes to taxes, this information is undoubtedly one of the cornerstones of public debate.
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information → go → debate
…and 43 more, not listed.
