Europe's Ultra-Rich Could Fund a Substantial Part of the EU's Budget
socialeurope.eu
socialeurope.eu
They start with NW >100 million and start decreasing the concept of Ultra-Rich until everyone non-broke eventually pays it.
In Spain it happened with the Work Tax which from >60k EUR (68k USD) goes to 45% as if earning 3k EUR (3.4k USD) per month made you rich.
Maybe if they taxed NW >100 million, you wouldn’t need a 50% tax on work.
Don't be mistaken, it's an "in addition to" tax, not "instead of", or else it wouldn't be pitched as one of many ways to plug a budget hole.
Some people may not like this to happen but it does and would.
The big argument around NYC's pied-à-terre tax among other policy changes was that it would force the wealthy to relocate outside of NYC to more favorable locations. That hasn't happened, and for a place like NYC, very unlikely to happen because people are attracted to the city for what it provides. Worst case, they leave, the property values decline and the city becomes more affordable with any gaps in businesses likely filled by those living and invested in the community.
If the state goes too far, those with wealth may take their wealth and invest in in friendlier investment climates where their home country suffers from wealth drain and potentially could end up as country versions of Detroit (or maybe like VZ where as the state confiscated property investment dried up).
There are articles about UK families that have been doing this for 5 generations. The entire family.
The problem is not money. There are far less working-age people, and it'll keep dropping for 25 years minimum. Which means the only solution is people working more, for someone else. A little bit more every year, for now without any visible end. Either that will happen, or the state (including elderly care) will have to shrink instead.
Pick your poison. And, of course, every electorate is saying "NONE OF THE ABOVE". Okay ...
Sounds worse than it is since it's progressive taxation meaning the effective tax rate for the entire 60k EUR is somewhere like ~29%, not 45.
€0 to €12,450: 19%
€12,451 to €20,200: 24%
€20,201 to €35,200: 30%
€35,201 to €60,000: 37%
Source: Gemini so it could be complete bullshit.
To be fair, VAT is heaver in Europe than for example US, so the overall tax burden might still feel more onerous.
In Spain if you earn more than 60k you are considered rich.
* There's one of 300k at 47% but even that one does not change so much as the <60k to >60k.
No, you are high earner. It puts you squarely in the top 10%.
60k euro gives you 33k after tax (2800 euro per month), and everything you do with that is taxed at minimum another 25% (that's the VAT)
And you miss the point that wealth is not determined by how much you earn, but how much you have.
Various super rich are nominally earning one dollar/euro.
I know doctors that have trouble finding a flat and others that complain about being classified as big renter because they only have six flats. The discriminator is not the income. (When we talk about the Ultra-Rich).
That IS my point. Earning is how you become wealthy. That is heavily taxed, because it's easy for the government to do. These taxes prevent anyone becoming wealthy.
They are, however, protecting people that already are wealthy. Cross the threshold where you make more from owning stuff than from income and Spanish taxes look a whole lot better, because you can determine yourself how much income you have. In other words: you only pay tax on the income you actually use for living. Any income used for wealth-building is not taxed (acquiring the actual assets still is but 20% in the worst case. Also investment gains are not taxed, if you structure things right). Cross the next threshold: where you wealth not only pays for living but actually lets you acquire more assets and it's even better. For that ("reinvestment") you pay ZERO percent taxes on the money used to grow your assets.
The very wealthy get richer in Spain. You just can never join them.
American tax numbers are only a little lower, but do not include health care. An American employer is likely paying around $8K for a single person or $20K for somebody with a family. That's a real and very heavy tax that Americans pay.
Which would make your 47% tax a 70% tax (minimum) in the current funding model. And that's assuming no rise in unemployment or anything like that.
That's actually pretty good compared to northwest Europe. I mean Norway has about 1500 euro per person per month in "free" taxes (from oil sales), which will also disappear, probably sooner than 2050. So add that, I guess.
Looking at those numbers, of course, one can easily see that the current financial structure of states will just not support that level of state expenditure (and it's a labor problem, not a money problem). So that is not what will happen because it simply can't.
> Taxes on wealth, crypto and financial trades could raise billions no single member state can collect alone.
The sad reality is that as soon as the EU introduces this, these families won't be Europe's Ultra Rich anymore. They'll soon be the UK/Swiss/Dubai/Israel/US Ultra Rich.
What the EU needs is:
- Less bureaucracy
- One capital market
- More venture capital
What the EU doesn't need is a larger budget. Is is really an issue if a family has a net worth north of 100 million if 90% of that is invested (directly or indirectly) in future growth of the EU?
> A financial transaction tax would not only generate additional revenue for the EU budget; it would also make short-term and speculative trading in financial markets more expensive.
This goes *directly* against the https://en.wikipedia.org/wiki/Efficient-market_hypothesis. Potentially creating more friction and less efficient capital allocation in an continent already struggling with growth and innovation.
> A tax on ultra-high wealth would have particularly high revenue potential. One possible approach would be a minimum tax for individuals with net wealth exceeding €100 million, ensuring that the taxes paid annually by this group amount to at least a specified proportion of their wealth. Such a tax would specifically target individuals whose effective tax burden is lower than that of other groups. At the same time, it could help to limit tax competition between member states for particularly wealthy residents.
The biggest competition does not from member states, rather it comes from Switzerland and the United Kingdom. Two countries where citizenship is (for most ultra-rich) a plane ride and a few administrative meetings away. USA, the middle-east and Israel offer other options, slightly further away.
Yeah, but the physical assets they own can’t move freely. The EU can still tax or seize assets within the EU.
This is true but effectively it would lower the value of those assets (since any future investor needs to account for the increased tax burden) which would also be negative for the EU.
If it has to be done, it should be at the sources of the wealth so that they can’t be dodged. Things like property taxes, corporate taxes, taxation of stock buybacks (which is a way to pay dividends without paying income tax on them). The middle class will still be paying these, but at least the ultra wealthy will be contributing on their share of the wealth generation too.
I'm sure the parasitic class will always find ways to partially dodge taxes but compared to income and capital gains taxes a strongly worded wealth tax would be much more difficult to avoid. We just need to be careful with the wording of the law to make sure lobbyists are not allowed to carve out any loopholes that can be abused by tax planners.
I don't think you've got the mechanism correct here. If a corporation has cash, they can pay dividends which lands in the pocket of every shareholder equally. Or they can buy those shares back from shareholders who are willing to cash in. If I hold shares and don't sell in the face of a buyback, I'm not getting a dividend. Instead, my on-paper wealth has increased by the amount that the buyback juiced the price of my shares. If I do sell, then I pay short term capital gains (which are effectively the same rate as income tax) or long term capital gains (which are lower but probably not low enough to offset the extra tax created by inflation)
It’s easier to “avoid” capital gains than it is to “avoid” income taxes by using things like trusts, borrowing against the stock, changing tax residency etc. Those loopholes should all be closed too, obviously, but a stock buyback is effectively a dividend under another name. It could be taxed that way if we wanted to do it. Then you’re taxing the wealth at source rather than trying to trace billionaires’ wealth around the world.
That is only because the system (at least in the US) is designed specifically to enable this. Tax code is mind boggingly complex because there are a million loopholes and special cases, so that if you can afford the top-tier accountants, you won't ever pay any taxes.
But there is nothing inherently necessary about this. We can know the net worth of people and tax them if the government just cared to do so.
Palantir (and every government intelligence agency) has that global database and can query it at will.
But taxing inheritances would still be preferred mechanism rather than taxing unrealized gains I think. That would target the EU's unproductive rent seeking heirs the best.
So they can buy things they don't need but just want. So they can really splurge on their many luxurious vacations for example. People in Europe work harder than Americans. They work fewer hours, but are much more productive than workers in the US.
Nobody should feel "incentivized" to work harder by the threat that they'll become homeless the moment they get sick or need an ambulance. If you feel like you'd never work hard if you didn't have that threat constantly hanging over you maybe you're just unnaturally lazy.
Isn't the answer obvious? So that you can afford cool things that you want. There needs to be a baseline of minimum services everyone gets (health care, education, food). If you want anything beyond that, like a nice house, nice car, nice toys, travel, etc. then that's the motivation to work harder.
Sure you would. Well, I can't assert about you, but most people in that position would.
First, what is usually left out of this kind of discussion is how much work it takes to earn an extra dollar. At minimum wage every extra dollar is a lot of work, so every penny in taxes is a big hit.
When you're making say 1 million a year, every extra dollar takes very little thought or effort, so getting less of each is a non-issue in practice. And when you're making billions, each dollar is asymptotically close to zero effort, so even at a 99% tax rate you'd be getting an extra penny for zero effort, which isn't bad at all when you're getting millions of those pennies.
But, we don't need to keep this theoretical, we can simply look at history.
In 1980 top tax rate was indeed 70%, and that did not stop people from working at making lots of money, buying Ferraris and mansions and yachts. So we know from historical fact that it wouldn't stop the rich from riching. It just makes society a tiny bit more fair.
Every one who can afford it uses private healthcare, because waiting lines are really long.
>childcare
Depends on the country, but not that universal and can be very expensive.
>higher education
A lot of people earn degrees which have no market value.
>excellent public transportation
Maybe in some parts of top tier cities, but in general most of the cities are choking with car traffic.