Wealth Taxes

Piketty’s central empirical finding, drawn from data spanning twenty countries and three centuries, is that when the rate of return on capital (r) exceeds the rate of economic growth (g), wealth tends to become increasingly concentrated as a structural feature of capitalism rather than an anomaly. The twentieth century’s relative equality, he argues, was a historical exception driven by world wars, economic shocks, and progressive taxation, not a natural stage of development. He proposes a global progressive wealth tax as a central policy response, while acknowledging its political difficulty.

Saez and Zucman propose an annual “wealth tax on corporations’ stock”: a 0.2% levy on the market value of publicly listed companies headquartered in G20 countries, raising roughly $180B/year on a $90T G20 market cap and designed to be progressive because equity ownership is highly concentrated. They emphasize administrability by having national securities commissions levy the tax (using existing securities-market regulatory infrastructure) and allowing in-kind payment via issuance of new shares, avoiding liquidity constraints while diluting shareholders by the tax rate.

Tax policy expert David Gamage has specifically proposed a "low-rate business wealth tax" for the AI era, arguing that using both income and wealth taxes creates a system harder to evade: "Income taxes face accounting manipulation; wealth taxes face asset valuation challenges. Using both makes the system harder to avoid." He analogizes this dual structure to asset management fees, where the wealth tax acts as a "management fee" for providing legal infrastructure protecting accumulated capital, while the income tax serves as a “performance fee” for profits generated in state markets.