At the UN’s Fourth International Conference on Financing for Development in July 2025, Spain, Brazil and South Africa jointly launched a proposal for a global wealth tax on the world’s richest individuals. The plan, a 2% annual wealth tax on the world’s top 3,000 billionaires, is being hailed as a potential game‑changer for global tax fairness (1). Yet, despite forecasts of trillions in revenue and growing public support, a binding global levy remains elusive. Why has the world stalled on taxing extreme fortunes, and what would it take to break the impasse?

The case for wealth taxes

Supporters of wealth taxes highlight that the ultra-rich currently pay almost no tax on their fortunes: a CESR analysis found that billionaires are taxed on just 0.3-0.4% of their total wealth (2). These same billionaires hold about $16.2 trillion in assets, making them wealthier than 95% of individuals combined (3). In contrast, individuals in OECD (Organisation for Economic Co-operation and Development) countries paid an average income tax of 35% in 2024 (4). With this in mind, some economists argue that the only fair way to tax billionaires is through a progressive wealth tax (5). Simply put: the more wealth increases, the more tax payments increase. Yet, currently only four OECD countries apply this model: Spain, Switzerland, Norway and Colombia (6).

Figure 1: Trends in Labour Taxes Across OECD Countries (4)

In fact, a global wealth tax of 2% could generate upwards of $2.1 trillion in revenue annually, enough to cover 7% of national (average) government budgets (7). Such an amount could fund major investments in education, healthcare and climate resilience at a time of growing international fiscal strain (8). The $2.6 trillion, for example, is more than double the climate finance “gap” in emerging economies (7).

Many surveys also document an increased public support for heavier taxes on the ultra wealthy. In the U.S., for example, more citizens than ever favor raising taxes on high-income households and corporations, even in fiscally conservative circles (9). A recent Oxfam and Greenpeace poll across 13 countries—including France, Germany, Italy and Spain—found that 77% of people would be more likely to support a political candidate who prioritizes taxing the wealthy (34). Advocates view this as a clear manifestation of popular legitimacy for wealth taxes (10).

Do wealth taxes really work?

Wealth taxes have a long history of pushback. Critics from the mainstream tax and economics community argue that these levies are hard to administer and largely ineffective (11). Valuing a billionaire’s assets every year is notoriously difficult. This is because the richest people usually derive much of their income from capital gains and assets, as opposed to labour. Assets like real estate, art or business stakes can be hard to appraise at market value, meaning frequent dispatches and high administrative costs. In fact, many of these assets aren’t even visible to annual valuation (8). In light of this, a common pushback against annual wealth taxes is the claim that ultra-wealthy individuals are "cash poor": their fortunes tied up in illiquid assets. Critics therefore argue that taxing unrealized wealth would force asset sales or distort investment behavior (12, 13). But wealth-tax proponents note that liquidity challenges are often overstated: the ultra-rich routinely access low-interest loans using their holdings as collateral, effectively spending against their wealth without triggering income taxes (14). Tailored policy design—such as allowing deferred payments, offering safe-harbor rules, or exempting certain illiquid assets up to a threshold—can address genuine hardship cases without compromising the broader equity goals of the tax (15).

Another major objection to wealth taxes is capital flight. Wealth is highly mobile, and there is evidence that high-net-worth individuals respond to punitive taxes by relocating or sheltering assets. France’s experience is often cited: the 2017 repeal of France’s annual wealth tax followed reports that thousands of wealthy French citizens (10,000 people with €35 billion in assets) had left the country to escape it. Sweden also abolished its wealth tax in 2007, after top entrepreneurs like IKEA’s Ingvar Kamprad emigrated, and tax revenues subsequently fell (8). These statistics are often weaponized as scare tactics when wealth taxes are discussed at the national level. However, the reality is that only 0.1% of the ultra-rich migrate due to wealth taxation (16, 17). France’s wealth tax, for example, had a comparably low minimum threshold–targeting the wealthy in general, rather than the ultra-rich, and thereby creating a distortion in the data (17).

Critics also note that past wealth taxes raised very little revenue. For context, current wealth taxes raise only around 0.4% of GDP in Norway (the highest) and about 0.2% in Spain. Given such low revenue, many economists question whether a wealth tax is worth the trouble (11). However, an OECD review found that wealth taxes contributed only faintly to overall wealth distribution because they often came with so many exemptions that their impact was negligible. These exemptions are often lobbied for by the very individuals that would be required to pay the wealth tax in the first place (6, 8).

The psychology of wealth

These technical debates, however, mask deeper barriers rooted in power and perception. The ideological hold of trickle‑down economics, which gained prevalence in the 20th century, is partly to blame. Popularized by US presidents Hoover and Reagan, the economic theory argues that any financial ‘benefits’ awarded to the wealthy will ‘trickle down’ to the less wealthy in the form of job creation, investment and economic growth. A key argument is that if, for example, technocrats were required to pay higher taxes, this would lead them to decrease the number of employees in their companies to maintain an ideal profit margin (18). In truth, there is little evidence to support this theory—but the narrative is still vigorously promoted (19, 20). Political influence plays a role: ultra‑rich individuals and other beneficiaries of low-taxation use lobbying, campaign donations and the media to shape tax discourse and protect their privileged financial treatments (21).

Psychological factors further dampen broader backing. Public opinion surveys reveal strong support for taxing millionaires, but once wealth definitions expand to include homeowner assets like primary residences (even that of millionaires), approval drops (10). One suggested reason for this is optimism bias: individuals tend to hope they too might become wealthy someday, making them reluctant to endorse policies perceived as penalizing their own future aspirations (22).

What happens now?

The recent wealth-tax proposal by Spain, Brazil and South Africa sparked more applause than anticipated. At its July 2025 unveiling, finance ministers from several emerging economies welcomed the ambition to curb billionaire tax avoidance, while several European capitals also signaled interest in exploring technical feasibility. The proposal has been entered onto the agenda for the OECD’s Committee on Fiscal Affairs, where working groups will analyze valuation methodologies and enforcement mechanisms over the coming six months. In parallel, the UN’s Financing for Development Office has scheduled a special session in early 2026 to debate the measure’s alignment with Sustainable Development Goals (2, 3). Due to the lack of formal treaty possibilities, momentum will likely depend on a small coalition of early adopters choosing to pilot bilateral or plurilateral agreements on measures like shared asset registries and joint audits before wider accession can be encouraged. In fact, France, Belgium, Colombia and the African Union have already signalled support for a global wealth tax: perhaps these countries could be among the early-adopters (33).

Unfortunately, key actors (the US, Germany, Italy, and the Gulf region) have historically opposed wealth taxes, fearing capital flight and political backlash (23, 24, 25). Thus, a truly global wealth tax treaty seems politically distant. Yet the idea has gained support in the media, with advocates arguing that new technologies like better data on cross-border assets, and digital tracking of ownership, might finally make enforcement more feasible than in the past (26).

Designing an EU levy

Even if a global wealth tax remains unlikely, the EU could take action. Tax policy currently falls under member-state jurisdiction in the EU, and as of now, only Spain (and to some extent, France) levies a wealth tax (6, 27). However, in May 2025, the EU Commissioner for Climate, Net Zero and Clean Growth, Wopke Hoekstra, confirmed that the Commission had launched a study on wealth-related taxes (28). This is purely analytical: the Commission cannot unilaterally impose an EU-wide tax without unanimous agreement. Still, an independent EU Tax Observatory has proposed a common minimum standard: a 2% levy on the richest 499 Europeans could collect about €42 billion in revenue a year (29). Yet, heavyweight member states such as Germany, the Netherlands and Italy have resisted binding measures in the past, citing concerns over competitiveness and economic sovereignty (24). However, this could change with rising public interest. Civil society groups pushed an EU citizens’ initiative in 2024 calling for a 2–5% tax on the top wealth holders; it fell short of the required 1 million signatures but did reflect significant grassroots support (30). With increased public discourse and momentum, EU member states may need to reconsider their respective positions (31).

Pathways to progress

If the world is to move beyond just talking about wealth taxes, several conditions must be met. At the global level, a coalition of the willing could negotiate a binding treaty harmonizing asset registrations, valuation methods, and enforcement protocols. Moreover, careful tax design, with tiered rates, exemptions for illiquid assets, and safe‑harbor return rules, could mitigate liquidity crises for asset‑rich but cash‑poor individuals (15). Finally, sustained public mobilization could shift the political calculus, making bold taxation of extreme wealth a feasible political objective again.

In an era where the wealth of the ultra-rich has quadrupled over two decades, taxing them is no longer a fringe idea but an emerging mainstream debate (32). As the UN proposal and the EU’s study propels the discussion onto the world stage, it will take technical ingenuity, political courage, and broad societal support to turn this proposal into policy—and potentially transform extreme fortunes into funding for the common good. Shall we?

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