The rich want to be taxed more. An open “millionaire’s letter” signed by 83 super-rich individuals calls on governments around the world to introduce “immediate, substantial and permanent” higher taxes on “people like us” as a way to pay for the coronavirus recovery. Similar letters have appeared in the past, including one in January 2020 signed by 120 billionaires and millionaires demanding higher taxes. Two of the world’s richest men, Warren Buffett and Bill Gates, have joined the growing call for the rich to pay more tax. Are they right?

The world is facing an unprecedented economic crisis. The IMF predicts the worst global economic shock of our lifetimes will be “unlike anything the world has seen before”. The crisis could deepen and entrench existing inequalities. The debt burden on governments will be comparable to “war debt” and will likely need to be paid off over multiple generations.

Given all this, should the richest pay higher taxes? In the US in 2018, for the first time on record, the richest households paid a lower tax rate than almost anybody else in the country. In response, during her presidential run, Elizabeth Warren called for an “ultra-millionaire tax” on the richest individuals in the US. Yet, at the same time, many European countries have been abandoning so-called “wealth taxes” (in the 1990s, a dozen European countries implemented wealth taxes, today just three do). What’s going on?

What do our readers think? We had a comment from Markus, who argues that many people we consider wealthy are actually “asset rich but cash poor”, and that “wealth taxes might potentially bankrupt them and destroy their companies with all the jobs they create”. Is he right?

To get a response, we put Markus’ comment to Chiara Putaturo, EU Inequality and Tax Policy Advisor at Oxfam International’s European Union office. Is Markus right?

Without going into too much technical detail, when we are talking about taxing the rich more, we are talking about taxing wealth. And, actually, wealth can include a lot of things. So, not only cash but also, for instance, cars, the value of property, inheritance, and capital gains. So, even if a person is poor in cash, there are a lot of other wealth items that can be taxed.

It’s true that it’s sometimes difficult to identify them, because there is also an issue of transparency of this wealth and also an issue of transferring wealth offshore and abroad, So, we need transparency and cooperation among countries.

For another perspective, we put the same comment to Martin Ågerup, President of the Danish free market think-tank CEPOS. What would he say?

Well, I think Markus has a very important point here. A lot of people with wealth – when you read about how wealthy they are – it’s based on an assessment of what the market value of their company is. It’s a bit like saying: if you own a house that’s worth 200,000 US dollars you have 200,000 dollars. You don’t. You could sell the house, and then you would have the money, or you could borrow money using the house as collateral, but then you would have to pay interest on that debt and there’s a risk of you losing the house.

That’s the same for somebody owning a company. If you have to go out to borrow money to pay a wealth tax, then slowly you’re losing the control over your company. And that has implications, because that would mean if we create wealth taxes or inheritance taxes that have that result then the people who have been successful building businesses would slowly lose control over the businesses that they’ve been running successfully.

So, we need to be aware of that. Wealth taxation is, generally speaking, not a good kind of tax. It’s better to tax income. Capital is problematic to tax, because capital gains is something you create from investment, and we want more investment; we want private individuals, entrepreneurs, investors from within the country or coming from the outside to create new businesses, jobs, innovation, and productivity growth, and we don’t do that when taxing capital. We should avoid that.

Next up, we had a comment from Peter, who argues: “All multinationals should be forced to pay more tax. For decades there has been a race to the bottom concerning taxes for big companies. And the results are clear: less investment in infrastructure, less money for social security and more taxes for citizens.” Is he right?

How would Chiara Putaturo from Oxfam International respond?

Peter is perfectly right. He also understands the reason why Oxfam works on tax justice. Because when we have corporations and rich individuals that avoid paying their fair share of taxes, countries cannot afford to pay for public services such as education, health and social protection that have been so important during this crisis. So, this is the first reason why we work on tax justice.

Peter is also right in identifying the problem of tax avoidance by corporations. In particular, there are a lot of tax loopholes concerning digital companies – let’s think about Amazon or Microsoft. We don’t have a tax system that can tax them in a fair way, and so they have been able to pay really low taxes until now, and we have seen during [the pandemic] that they have been making even greater profits than before. So, it’s really an issue of fairness and justice to ask for greater contributions from them.

Finally, how would Danish economist Martin Ågerup respond?

No, I disagree with Peter here. If you have a market with competition (which is what we should be striving for always, not to have private or public monopolies) then the taxes that corporations pay, in the end, aren’t actually paid by the corporations.

When you have higher corporate taxes, you have less investment in the economy. Lower investment results in lower productivity growth, and therefore lower growth in wages. So, in the end, it’s actually employees who pay the corporate taxes, not the corporations. A thing can’t pay taxes, it’s always people who pay taxes. If we have a ‘petrol tax’, it’s not paid by petrol but by the people using petrol. It’s the same with corporate taxes, which aren’t paid by corporations but by either the owners of the corporations or the employees, and typically it will be the employees.

In my opinion, corporate taxes should be abolished altogether. So, I think it’s good we have tax competition that’s pushing down corporate taxes, because it’s a bad type of taxation. In the end, corporate taxes are a very small proportion of the total tax revenue in most countries. The contribution that corporations bring in terms of public revenue come from the taxes that the employees of the corporations pay through the jobs that they have because of the existence of the corporation and the investment that the corporation has made.

Do the rich pay too little tax? Or are wealthy individuals “job creators”? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!

IMAGE CREDITS: Photo by Tony Pham on Unsplash

69 comments Post a commentcomment

What do YOU think?

  1. avatar
    Catherine Benning

    Do the rich pay too little tax?

    One can assume that as they have been out and about a bit, they fully understand the need for balanced books of necessary finance to keep themselves in business. So does any thriving economy and the infrastructure it has to have to survive.

    They must realise, like the rest of us, that we have become a down market underclass of unhygienic imbeciles as they too see the filth and pot holes in the streets. They also see the Health service barely able to sustain itself with the mass migration the size of another planet full of people expecting our own tax payers to also keep them looked after, even though they don’t want to pay for it. And the rich are the people who have brought this about and benefitted from it. And they know it. They being brighter than most. in this field.

    They also know the mess is not only affecting those in their families, who are not in the position of independence from using our system, in the same way the rest of us have to depend on it. They also know in cases like this corona virus and accident and emergency situations they also have to use the failing health care on offer, otherwise they too die. So, smartly, they are asking governments to save them and their own from the derelict situation brought about by non funding.

    Here is a tip for them. Stop backing globalism, it cannot work, no matter how much money you think you can coin in via the masses. They will simply break your bank as well as ours with it. Return production to the West, it is cheaper in the long run and provides better. Deferred gratification always applies, immediate pay offs do not. Yes, pay the substantial tax you used to, you will miss nothing as well as gain your self respect once again. We need you to keep this wonderful civilisation in tact. If you don’t you too will find you are destroyed..

    One more thing, make sure those in the position of ruler are fit for the job. Presently they are not. And you know that as well.

  2. avatar

    No they don’t. Actually, they pay much more than average people do. Talking about the percentage of the tax, this doesn’t look right if laws are not equal for different people. Equality means that you can’t require more from poor people than from rich people, neither you can require more from reach than from poor. Otherwise it is not about equality any more.

    • avatar
      Catherine Benning

      @ Boris

      They do not pay more at all. They pay zero. Except to accountants who play the get out game for them. Tax write offs are massive, complicated and hard to fathom. Don’t believe it, take a look at Amazon.

      It is naive to believe there is such a thing as equality. Neither should there be. If you believe there should be give a reason. There is none. That is an absurd statement. And usually given out by oily politicians so the masses fall for their line of, we are sorry, we did not know it was happening. When of course they knew full well what was happening. They set it up that way.

      They also imported inequality it into our continent fully aware of how the masses they encouraged to invade our culture lived and preyed on women and children. Will any one of those politicians face accusation and charges for bringing such action against our people? Of course not, for, they are sorry, they didn’t know what was going on. Do you raise a voice to condemn this ‘inequality’ under the law, or, even inequality of attitude? No… I wonder why? Could it be you don’t, after all believe in equality for the masses?

      People are not born equal. What you mean is equality under the law. Well there is no equality there either. An example would be the bunch of foreign born old men in Rochdale, grooming, abusing and raping pale children and young women for years, whilst the police and social services, including government officials, stayed quiet as they ‘feared’ that old chestnut called rac. im accusations. Which also was an untruth. More than likely there was a pay off of some kind that kept the mouths shut.

      And compare that with todays Epstein and Maxwell story. A British Prince also in the mix there. However, the Rochdale young girls were babies, these newer females were much older. In fact, at the time, in the main they were with consent, of an age considered legal. One group were immigrants from the third world, just as those trading the bodies of the present, are indigenous and of a much paler order. See any equality with their treatment?

      The immigrant brigade still at it today all living alive and well. The other found dead in his cell. Then, we wake up to this same immigrant crowd presently in the business of slave trading, right in our cities and towns with sweat shop labour. The estimate being a possibility of 10,000 of these women, who are third world imports, who cannot speak the language used for pittance wages. The pretence being, it was unknown by authorities. The entire city of Leicester knew about it for decades but not the local Bobby.

      The point I am making here is, these crimes were well known about for years in both severity and extent. The women used left to rot. Yet, the law remains easy going on those who come to the West to abuse its civility and make a fortune from it in these subversive ways. In other words, the law turns a blind eye to men who have no conscience. Women receive no compensation from these individuals and the same beasts using them are not sent back where they belong, having a mentality that suits those parts of the planet they originated. FGM is another inequality toward women. Likewise, thousands of women abused in this way and the European tax payer having to pick up the very expensive bill for their treatment in Western hospitals. And to add injury to injustice, these same people now want us to pay them compensation for a history few have any knowledge of. After ‘they’ have the gall to come here and continue with their abusive lives, right in our midst, costing us a fortune.

      Worse, those in power that imported this low life group of ignorant movers and shakers, left to play the same game another day. The paler skins either dead in a prison cell or relentlessly kept in locked up, without a world of what is happening to them. No charges, no court hearing, no release, just tortured and not a word from the masses to have them freed or even give justice. That is not equality under any law. Fully known about by all but carefully forgotten whilst in full view.

      So, don’t be silly. There is no such thing as equality. Not on any level.Never was and unlikely ever will be.

  3. avatar

    No, I don’t agree. Billionaires can be more supportive in other ways rather than just counting their money and perhaps blackmailing others by making a kind of spending strike.
    In fact, it doesn’t make sense to me when billionairs demand higher taxes to help paying recovery of their own activities.

  4. avatar

    As a percentage of their income, they still pay far less. And I’d have to know more about the details of this “covid recovery”, because in America, we just witnessed the largest-ever transfer of wealth ever to the financial class, in the name of “covid recovery”.

    • avatar

      Are you kidding? They pay more both in absolute terms and as a percentage. Usually in the lower brackets the rate is 10 to 20%. In the upper band they can be 40 to 50%. The higher the income the more you pay.

    • avatar

      No, I’m not kidding. If what you said were true, rich people would be jumping on the opportunity to have a flat tax.

    • avatar

      Not to mention all of the financial instruments that rich people can make use of, like “charitable donations” (I believe that’s what pays for debating Europe), offshore tax havens, trusts, inheritance, the art market… and that’s far from an exhaustive list. For normal people, all income is taxable income, for rich people, most of it isn’t.

    • avatar

      it’s a vicious cycle, the way I see it. Central Banks are “printing” money (since March Bank of England has “printed” £1.3 trillion!), most of that money ends up in the hands of those who already have a lot, and then they “bury it in the forest” using methods mentioned by you, avoid tax, and when all the money has been “buried”, BoE “prints” more money and the cycle repeats. Wealth is being created but only for a very small percentage of people, when the rest of us haven’t seen a real pay rise in decades and we’re being denied public services due to tax avoidance and wealth concentration at the top.
      It’s crazy!

  5. avatar

    “They’re still rich, so…yes”

    • avatar


    • avatar

      do i need to add that i was being sarcastic?

    • avatar

      no, my bad. Sorry for being prejudiced.

    • avatar

      this but unironically

  6. avatar

    I think this is another inappropriate question. The more important question is to ask why this system creates such differences in the wellbeing of people and how can we make sure that is someone earns some extra, then that is coming from a valid source, not from some sort of illegal activities. Like for example how is it possible that we have something called off-shores right in the middle of Europe? We allow criminals store billions in the banking system and then create a populistic illusion that we care about the social aspect by barely touching the tip of the iceberg? Please start looking in to the root of the issues.

  7. avatar

    Why did they ask to be taxed, instead of just donating then?

  8. avatar

    Really? Of course they want to avoid taxes, this is just PR. They say to the press they want to be taxed more while they continue lobbying on the backstage to be taxed less. 2020 and people still believe billionaires are good guys.

  9. avatar
    Catherine Benning


    The question is with reference to Europe not the US….. However, the US banking system does affect the entire banking system world wide.

    Yes, it is an accountancy fiddle with get out clauses, etc. But, the way it was funded previously at between 70% to 95% was the way the West enabled itself to run the economy to the benefit of all. Including the rich. They did this along with tax paid from the ordinary guy, as they had jobs that are now non existent. Hence less money for the Inland Revenue pocket today.

    Corporate tax is another swindle. Of course those in the top drawer tell government stooges, they get more off them in the long run, as the amount given ends up somehow higher, as they hang on to less. LOL. Nice if you can get away that bull.

    Taxes: The US facts. The fun they had with the tax rates under Roosevelt.
    Here is a little information on financial inequality over the decades.

    Education Education Education

    And the UK was even worse for the tax payer. Or, is that an ill conceived message?

    During the 1950s and 1960s, income tax in the UK was at its highest levels reaching a 90% rate. In 1965 a separate Corporation Tax was established for businesses. When Margaret Thatcher came to power in 1979 the income tax top-rate was 83% whilst the basic rate was 33%

  10. avatar

    Do the rich pay any tax? Like at all? Not even talking of percentages guys. Billionaires pay less tax than you and me average Joes

  11. avatar

    Yes and as some of them just declared!

  12. avatar

    If they’re rich, they pay too little. If they pay enough, they’re not rich.

  13. avatar

    Shouldn’t we just eat them and redistribute their wealth?

    • avatar

      hell yeah

  14. avatar

    No. Martin Ågerup is right, we should’t punish success. I don’t care about inequality because the capitalist economy is not a fixed pie. Wealth comes from massive value creation not from unfair redistribution. No nation can tax itself into prosperity.

    • avatar

      creating infinite wealth from a finite system. Only a madman or an economist could believe such a paradox.

    • avatar

      We are far from attempting to create infinite wealth. As about the finite system, I won’t try to solve tomorrows problems with today’s technology. Makes no sense to do that. But also because any asset or commodity has a price, which depends on its scarcity and the market’s demand. That’s why I don’t think resources will ever deplete. Because a scarce commodity’s price will crush its demand, long before depletion.

  15. avatar

    They are afraid of the aftermath

  16. avatar

    In my opinion (and also in the opinion of the greatest minds of the world) increasing the taxation on big incomes, on rich people let’s say, might lead to a undesired effect, the reduction of interest in performant businesses, therefore in job creation, therefore social benefit. For this reason I suppose that we reached a certain level of knowledge in order to differentiate a business that generates more value for the society, that brings, apart from effort, innovation and progress, than speculative ones that only supply a temporary demand or a weakness of a certain system. Nevertheless, information and opportunity have to be credited too, but not on the same level. Let’s not ignore the fact that a rich state is a state with many wealthy citizens and many wealthy citizens are the well payed ones and they are well payed because of the importance of their work in terms of value on work market or productivity.

    • avatar
      Catherine Benning

      @ Cãlin

      Here is one of the great minds who doesn’t think the way you do. His name is Prof: Richard Wolf. You should broaden your horizons a little bit.

  17. avatar

    Bullshit, no-one asked all the “rich” people in the world anything recently, let alone that 83% of them answered the way you claim. From a global point of view 25% of people living in rich countries are in the global 1%, most of them don’t even feel rich.

    • avatar

      The 83 referred to an absolute number rather than a percentage:

      An open “millionaire’s letter” signed by 83 super-rich individuals calls on governments around the world to introduce “immediate, substantial and permanent” higher taxes on “people like us” as a way to pay for the coronavirus recovery

    • avatar

      I see. Well if it’s only 83 people it means even less.

  18. avatar

    Of course, and i ll explain later why

  19. avatar
    EU Reform- Proactive

    If the rich want to be taxed more, why not do them such favor and draw up an ethical international tax code & abolish all global tax havens? No exception or loopholes. Similar to the UNHR. Why not test their genuineness?

    A good example could be set by the 10 European Nations known to defend & support unethical tax practices. How else can the war against global tax avoidance be won- which is openly practiced by the wealthiest 1% with the support of many national politicians & bankers?

    It is reported that tax avoidance accounts between $21 to $32 trillion globally- most of it is hidden in offshore tax havens. The leaked Panama Papers from 2016 exposed 214,488 offshore entities dating back to the 1970s. Why did nobody seriously act on these revelations yet? That is where to hit all these poor elites, tax avoiders & evaders hardest.

    Why the sudden EU awareness? Does the EU consider to find the 750 billion euro Covid-19 bailout that way= a zero way? It is estimated that ~800 billion euros are lost annually in the EU budget.

    To discuss an increase in the tax rate for the rich on this forum is simply a disingenuous attempt- or a mere diversion tactic! The 1% hardly pay any tax anyways. Even a 100% increase on a zero taxable income remains zero! Clever these elites- eh?

  20. avatar

    apparently they don’t pay tax at all (as we saw the case with Bezos and Musk).Here’s a question for you -” Why there isn’t sanctions against the City of London, when it’s considered an offshore zone?” The problem is not the low tax rate, the problem is that the law apparently does not apply to the rich.

  21. avatar

    apparently they don’t pay tax at all (as we saw the case with Bezos and Musk).Here’s a question for you -” Why there isn’t sanctions against the City of London, when it’s considered an offshore zone?” The problem is not the low tax rate, the problem is that the law apparently does not apply to the rich.

  22. avatar

    apparently they don’t pay tax at all (as we saw the case with Bezos and Musk).Here’s a question for you -” Why there isn’t sanctions against the City of London, when it’s considered an offshore zone?” The problem is not the low tax rate, the problem is that the law apparently does not apply to the rich.

  23. avatar

    apparently they don’t pay tax at all (as we saw the case with Bezos and Musk).Here’s a question for you -” Why there isn’t sanctions against the City of London, when it’s considered an offshore zone?” The problem is not the low tax rate, the problem is that the law apparently does not apply to the rich.

  24. avatar

    apparently they don’t pay tax at all (as we saw the case with Bezos and Musk).Here’s a question for you -” Why there isn’t sanctions against the City of London, when it’s considered an offshore zone?” The problem is not the low tax rate, the problem is that the law apparently does not apply to the rich.

  25. avatar

    Is this a real question? No doubt.

  26. avatar

    If people read the question..its about corporate tax…not personalThe move to a minimum (15%) tax may sound reasonable…but like all,will have unintended consequences..wont make much difference to the tech giants at the macro level.. but will have negative impact to various countries and entrepreneurship.

  27. avatar

    I think the better question would be if progressive tax system will be a better way to spend their money. It is not a simple question to answer, and honestly both sides take too radical and somewhat idealistic interpretations. The trickle down economy is a fairy-tale, but so is the overly-involved mass-administration. I would love to see some diversification. Axing money flows is not a smart thing in global economy

  28. avatar

    If that helps to make Amazon and Google to pay taxes then hell YES!

  29. avatar

    As so many times before, the question is not the correct one. The problem is not in low taxation, but in the reasonability of what corporations do for living, how they form their prices and how they design and deliver their products. Stop them from doing planned obsolescence, tenfold overpricing and unfair tactics and then we speak. Of course we have to understand, that solving those issues will slow the economy by a lot. But it is one or the other, we can be reasonable OR we can grow the economy, not both. Increasing taxes will only cause the prices to spike and we can all pay that increase from our pockets, simply because those in power will never take the hit if they can avoid doing so, and they can. And one last thing: being rich should not be seen as some sort of sin, that is how the soviets were thinking, not a good example to follow, but abusing people should be. Work to stop slavery (the thing you call these days work and pay only the amount that is barely sufficient to sustain people’s lives so they can keep on working), don’t put even more pressure on them in this indirect manner trying to look like it is done for the people. It is not.

  30. avatar

    Yes. The so-called liberalisation didn’t liberate anyone except the wallets of the few. I would take it a step further and tech giants should be forced to split up and create an economic environment with healthy competition. The arguments I read that higher taxes are causing higher pricing are true when there isn’t enough competition.

  31. avatar

    Yes they do, what kind of question is that? The average tax payers pay a lot more than rich ones or companies, which have from governments benovelent laws in order to keep their income for economic porpuses …

  32. avatar

    You are always following Us instead of initiating a strong genuine policy.. You should have done it long time ago… But you face the veto of Ireland and Nederland.. We expect Europe to be strong and in power not a eunuque…

  33. avatar

    Yes, they do. Most taxes in one country come from the middle class and the poor. Philantropy and charity are not excuses for the rich should pay their fair share. In fact they are part of the problem. The rich use philantropy as a way to shine their public image, to avoid taxes and to earn even more money.

  34. avatar

    Yes, and the more they use a lot of tools created for rich people to avoid taxes.

  35. avatar

    Taxes are only for normal people.

  36. avatar

    The rich pay nothing hahah to be more accurate they pay the right ppl, but we dont call that taxes.

  37. avatar

    Bill Gates? The one who has a ‘charity’ so he can avoid paying tax, then boasts on CNN at Davos that he made $200 billion from vaccine investments over 10 years from a $10bn investment in his ‘charity’? Please. What we need is a wealth cap, not tax. maybe at the $1 bn mark. These crazy billionaires and their psychotic visions must not have all this power their billions give them and then run the world with the key players and decision-makers that they bought.

    • avatar

      Julia Hadjikyriacou truth,these guys are running the world,besos ,musk,gates

    • avatar

      Stijn De Bondt They have unchecked power and zero regulations.

  38. avatar

    The rich are getting richer and the poor dont get anything, normal working class is paying way to much taxes and now with the green transition high energy bills too.Here we are going to shut down nuclear,and buillding gas plants with the approval from europe.i live in Belgium and i m sick of the corrupt politicians with hidden agendas.

  39. avatar

    Politicians are lying criminals in suits

  40. avatar

    They do, for sure. But simply raising taxes won’t work, because they’ll find a way arround it. Something else needs to be done, and that’s raising the income of the middle class, force all the big employers to pay a fair living wage. This way you’ll get more money from taxing the middle class, a category that really has no other option except to pay its taxes and also less money will be concentrated un the hands of the few.

  41. avatar

    The rich want to be taxed more? Do they really? Why aren’t they? All they have to do is not to put money in offshore accounts to evade taxes. Pretty easy, if you ask me!

  42. avatar

    Off course they do, cause you created in the past those off shore “black holes”.

  43. avatar

    Not only the rich pay too little tax (and have been paying less and less since the Thatcher-Reagan duo unleashed unrestrained capitalism upon the world), but they have been colluding with most governments to avoid paying tax altogether, based on a mix of fake threat for hurting growth and a mix of fear of personal retaliation. It takes courage to go after the big sharks, but this is where most people would expect the EU to be ruthless. If not the EU, who else would stamp this down? We are talking how people are losing faith in government: this is a make-or-break issue. Deal with it, or else.

  44. avatar
    flemming dyremose

    When you earn money, you pay tax. If you are an employe this tax is extracted from your salary. If you have a company your earnings is the company profits. If you tax company profits, you do potensially reduce investment, and it can be debated if such a tax in beneficially for creating wealth. But money that is extracted from the profit, for the use of consumption, should be taxed at the same rate as a salary for an employe. I believe this is already happening. As far as I know, and experience in Denmark, all finance tranferred from a company to ones personal account, is taxed progressively. When I mentioned that is can be debated whether or not profit should be taxed, it is because that profit not necessarily results in investments or re-investments. Therefore a tax on profit could be either restricted to profit that is not re-invested in the company, or it could be earmarked to projects that increase wealth in society, through technological development and research. This would ensure that the taxed money wil create jobs and help raise the community to a higher and more competetive level.

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