Money & Macro - 2026-07-03
Check out our advertising sponsor, The Economist, and get access to global coverage at an exclusive 35% discount at https://economist.com/moneymacro Recommended follow-up articles: 1. Gabriel Zucman makes the case for a billionaire tax - https://www.economist.com/insider/inside-economics/gabriel-zucman-makes-the-case-for-a-billionaire-tax 2. Don’t tax wealth - https://www.economist.com/finance-and-economics/2025/10/02/dont-tax-wealth 3. How much tax should the rich pay? - https://www.economist.com/insider/inside-economics/how-much-tax-should-the-rich-pay If you appreciate the research, consider buying me a 'coffee' at https://ko-fi.com/moneymacro or supporting long-term for membership benefits via: https://www.patreon.com/moneymacro WANT AN IN-DEPTH INDUSTRIAL POLICY MASTERCLASS? △ https://school.moneymacro.net/p/industrial-policy-masterclass LIKE CHATTING ECON WITH ME? △ Follow me on Twitter: https://twitter.com/joerischasfoort △ Follow me on LinkedIn: https://www.linkedin.com/in/joeri-schasfoort/ △ I have a private Discord server for Senior and Chief economist Patrons / members. SOURCES: 1. https://www.bostonreview.net/forum/gabriel-zucman-taxing-superrich/ 2. https://www.ft.com/content/40d6d30a-1568-4b3f-bcb3-f64e37d2ec9f?syn-25a6b1a6=1 3. https://www.aeaweb.org/articles?id=10.1257/aer.20241596&&from=f 4. https://www.bbc.com/news/articles/c8j2m2p8dgmo 5. https://www.youtube.com/shorts/FS6Ma_6M60o 6. https://equalitytrust.org.uk/evidence-base/billionaire-britain-2025/ 7. https://www.ft.com/content/331a0465-4125-49d7-bf79-d4eaf90ce60c?syn-25a6b1a6=1 8. https://www.sciencedirect.com/science/article/abs/pii/S0165176523000010 9. https://www.economist.com/insider/inside-economics/gabriel-zucman-makes-the-case-for-a-billionaire-tax 10. https://www.economist.com/finance-and-economics/2025/10/02/dont-tax-wealth 11. https://www.economist.com/insider/inside-economics/how-much-tax-should-the-rich-pay Timestamps: 00:00 - intro 02:33 - the tax they hate most 06:21 - how many actually leave? 10:49 - what happens to the economy? 12:21 - the real weakness of wealth taxes 15:40 - conclusion: a smarter way to tax the rich Attribution: Music by Epidemic Sound: http://nebula.tv/epidemic Thank you to AP Archive for access to their archival footage. Stock footage and others clips by Getty Narrated and produced by Dr. Joeri Schasfoort Written and researched by Dr. Joeri Schasfoort and Dr. Alejandro Iribas De La Puerta Edited by Natalia Karpacz
Its a shame that land value tax and resource royalties were not mentioned. The land and the oil cannot be used from a tax heaven.
Yeah the US taxes land today and royalties , so there’s lots of data on this
Yeah good point that would help a lot.
I am also surprised that he says the ultra rich pay 20-30% tax. That seems way too high - given you often hear they pay more like 2%. But maybe those are the exceptions?
@JosPoortvliet Im guessing that is the capital gains tax, so the 20-30% is what they pay when they sell stocks for cash, since that is the primary way the ultra rich get cash. The 2% number comes probably from their tax amount paid by realizing gains on stocks divided by their total net worth. Which of these two is more accurate and fair is for you to decide.
@DF-dx1ef US taxes property and not land value, which is vastly different.
Land value tax is the most fair tax and cannot be dodged, more countries should tax land value instead of income if they want to create a more fair tax system.
0:10 It is very important to remember that on top of tax, the average person (in the US and Europe) spend about 50-60% of after tax income on necessities like rent and food. Those necessities are negligible for the wealthy so the effective percent of non-disposable income is actually 60% for Americans and 75% for Europeans vs 20-30% that wealthy pay.
Every "wealth tax doesn't work" video is at the same time saying 'lets do a small tax so we don't scare them away' and ending on 'so we get so little from a wealth tax is not even worth adding it'. Good job going over it more in depth
You recognize propaganda. The earthy hire advertising companies to do this work.
Wealth tax literally doesn’t work and most solution videos say there shouldnt be a tax
@redalertsteve_ Wealth tax has always worked. From FDR to 1976 it worked like a dream.
@redalertsteve_literally doesn't work. There is no basis for those words. Of course it would work. Duh
Asset tax examples can be found across Western europe, but these don't fit the narrative. Great Britain wants to maintain a european level of public service, but it refuses to have the trade and tax policies necessary to support such a level.
Why is property tax not m part of the equation? It seems like the widest wealth tax that affects nearly all classes
Property tax is usually a local thing, i pay my town and state property tax (maybe the county gets a share, I'd have to double check but literally 3/5ths of it goes to private schools across the state and it is such a racket), but there is no federal tax here (USA). Every country and state is different, but property taxes are usually quite a local affair
@asv2442yes, but by funding the local government with property taxes, that takes financial pressure off of the federal government to fund infrastructure and services at the state level. So it does go to the government by proxy.
Property taxes are great I built my own house then the government decided it was worth way more than what I spent to build it.
@davidwelty9763 Oh, for sure, and depending on the state, it probably isn't going to fix the roads or anything. We pay corporations for putting their names on our stadiums and members of our government, both parties, were literally the people that defended the Sackler's for causing the opiod crisis. Former governor was running a brothel out of the youth detention center and his brother wants to start it back up if he wins the coming election.
The only person that ever paved the potholes or put in the water and sewage lines was Obama with the TAARP money and like this whole place was losing their minds over it. But instead of making the state better, we cut all Healthcare services. My property tax went up this year and is going up next year, while we're trying to find a way to segregate our schools again. Ugh.
Sorry for complaining but it's crazy to me that this is what we do with my money. I wouldn't be complaining if it went to high-speed rails and shit tho 😅
@asv2442 that's like Sweden is a local thing within a the EU. It's just a question of scale. You might say more local equals more democratic , but that argument could be applied to the wealth tax too
The simplest solution would be to classify the act of borrowing against unrealised capital as a form of "realisation"
If you just see your stocks appreciate, it's fine if you are not taxed, because you can't do anything with those stocks, but if you use them in any way, you're using them to realise your power. And thus you should be taxed on those "realisations" as if you sold those stocks
Way to open the taxes to everyone, and if not then ruin the banking business.
🫵🏾🤡
That's a great idea.
@michaelorajekwe9147 Wake up, even every right-winger I've ever talked with thinks billionaires should have to pay at least the same amount of tax as everyone else. No-one is for the current system where some can borrow millions tax-free against their shares for use for living a lavish lifestyle and not having to pay any tax. Not even you are for this if you think about it. Ask your friends. None of them are for it.
Yeah it’s not fair that when we try to pull from 401k we get taxed again but they can take a loan on their assets without any taxes
There is no way to know, you cant see what they do in private with banks
Look at Switzerland! Very low wealth tax (fraction of a percent) but across a broad base (anyone with wealth over 80,000 CHF). In conjunction with no capital gains tax, it seems to work.
The study has a very small sample size. Norway has 18 billionaires, Denmark 6. Variation in these numbers seems anecdotic and does not apply on the UK with its 157 billionaires.
All my rich acquaintances already spend much of the year abroad. I can't imagine there'd be much change in their life by changing where they 'live'.
Sweden has ~50 billionaires though
@kramelbbiw @kramelbbiw
It is not the people you fear loosing, it’s their capital and, sometimes, their network of contacts and grown relations but above all, capital is without value strategically unless it is actually tied down in an asset. Likewise, theoretical ownership is irrelevant during war time. And make no mistake - war has a way of making sure that reality is paid its due and must not be ignored.
The paper wars outcome matters little in the grand scheme of things. Take an average billionaire. They own a business network which makes its money via shaping reality, assets like factories or intellectual production - they are in other words NOT what is actually matters. It’s what they OWN that does.
Now, one needs elites. The actual extent of their power however must always be tied to the value they can provide to society and too often, a wealthy elite is not a net profit but a net loss. It extracts value instead of adding to it. One must also distinguish greatly between the different elite structures - some are valuable managers who do carry their share and integrate themselves ( meaning their vast holdings ) well as an aspect of the larger society - others are arguably downright parasitic.
Divide et impera doesn’t just work for the top of society. These powerful groups must be treated as seperate groups, not a vast mutual interest.
And Sweden and Denmark are culturally very similar with greater emphasis on public service and communal cohesion. Very different to the rest of the world.
I agre it is not enough to make proper over time statistcis. But when a nation has less than 20 biliones (every one of them over 5% of the statistics each) what other numbers can you use?
My understanding is that wealth taxes are not meant to be a solution for state deficits, but to combat the concentration of wealth in the hands of a shrinking population of elites and the deleterious effects that increasing inequality has on a society. In this case, I think a valuable topic to research would be how wealth taxes affect inequality in a society as well as getting an accurate read on the actual effects of inequality to begin with.
inequality highlights envy in the society that would otherwise aimed at potential poor people, without being detected
Nope. It’s just political posturing. It’s pointless!
@oppionatedindividual8256 Well done ignoring everything that was said or in the video!
This is a cognitive failure: why are you focused on 'inequality'? You should be focused on 'how well are the bottom half doing financially' (I am). Because focusing on the worse off doing better is so much more wholesome than the envy-revenge of taxing the rich. Socialism has tried blowing the rich out the water for 110 years and all that those countries have achieved is to make everyone poor. If that kind of thing makes you happy, then logic will be wasted on you, my friend....
@danguee1Throughout history, cyclical expansions in wealth inequality have proven to be drivers of large scale socioeconomic unrest, so the focus on that is apt.
It actually doesn't really matter if most people are making a bit more money barely above inflation, when a small subset of the population is accruing exponentially larger sums and hoarding the bulk of a society's tangible assets as a result.
Basically, if the governments and elites don't find an effective and fair way of sharing a portion of wealth for the wider benefit of society, history tells us that violent revolution will force that redistribution...
After listening to this, it's clear the problem is putting in loop holes.
Don't put in exemptions and it's pointless moving the money.
To successfully raise 1% of tax revenue? The larger issue is it requires a ton of effort to try to implement and doesn’t put a dent in the problem
@DevNug IMO it's not so much about raising money, as it is about curbing the spiralling power of the wealthy.
@s@shauntaylor9888 Yeah but they don’t do that either, since that isn’t what they were ever designed to do. They are designed to raise revenue, but they raise less than initially thought which is why they’ve been abolished in most countries
@DevNug bank robbers debating how they can rob more effectively. “Maybe if we strap the tellers to chairs and take a few hostages…”
Not just loopholes, it's categorization and valuation are constantly changing and hard to assess. Imagine putting your house for sale at different times of the year, the "valuation" of the same asset fluctuates drastically based on all sorts of ever changing conditions.
16:50 VAT is regressive even at the bottom, because if you live at the edge of your paycheck, your entire paycheck gets hit by VAT.
In Florida, there is not income tax, the state has a 6% sales tax. Except for essentials like food, baby stuff, some medical items. So the taxes aren't regressive on things you have to buy and only on things that are deemed discretionary. Still a gas tax though lol.
Canadian's think so they do an incredible amount of shopping in our state.
@itsatrap7215 Same with Texas, essentials are fully tax free, and so is your income. Property taxes are horrible, though.
VAT is genraly a fixed % for everyone. I guarantee that someone "live at the edge of your paycheck" pay less in VAT than wealthy people
@ssu7653Yes. A fixed percentage of your consumption. And your consumption likely scales in absolute terms with higher wages. Your base consumption however does not scale with your wages. Neither is your consumption likely to grow or stay stay the same relative to your wages.
"Sensational headlines heavily cited a report by wealth advisory firm Henley & Partners, claiming thousands of millionaires were fleeing the UK. However, an analysis by the Tax Justice Network noted that the projected departures represented a mere 0.3% of the UK’s 3.06 million millionaires. Even if the departures continued at that exact rate with zero new millionaires being created, it would take over 300 years for the UK to lose its millionaire population"
"Following the 2022 center-left government's decision to hike the wealth tax to 1.1%, a distinct wave of ultra-wealthy individuals did depart for low-tax destinations like Switzerland. However, research into the total taxable wealth in Norway showed that only about 2% of the country's millionaire wealth actually left."
There’s really only one number that matters in this topic, from a tax policy perspective:
What is the net change to tax income from the affected brackets?
Does the amount raised from the remaining wealthy individuals make up for the amount lost from departing ones? Is it a net negative or positive? The absolute percentage of people leaving does not answer that question on its own.
@big-e-squared the amount raised far surpassed any millionaire leaving, both in norway and uk, I dont have the numbers here so I recommend going after then if you want, but as far as I know they had net positive growths, including a 42b krones raise of funds for norway, tho the UK i dont know
Most millionaires don't pay any wealth tax, for these numbers to be meaningful, you need to look at the number of people subject to the wealth tax only.
Not all wealthy are equal.
Some spend millions in services and goods, employ people, pay salaries for workers.
Other wealthy people hardly spend a dime and contribute little to the economy.
The big spenders are the ones you don't want to lose.
@RosoneandWatsonthat's a silly way of looking at contributions. If you don't spend a thing and invest, you're also contributing to the economy. Almost noone has large sums sitting in bank accounts doing nothing. Most money is working one way or another.
Something that would be interesting to see as part of this analysis is how this affects the startup scene.
Both Sweden and Denmark are thriving startup hubs because there’s vc firms and tax planning is “reasonable”.
I imagine a much harder stance could hurt the scene: Klarna, Spotify, Lovabe, Legora, Pleo, etc. so it’s not only some already wealthy leaving, but sacrificing future ones.
Dear Joeri,
Thank you for your always interesting and insightful videos. I live in Denmark and recently came across a political party that was represented in the Danish Parliament until 1981, called the Danish Social Liberal Party (Retsforbundet). The party’s ideas were largely based on those of the American economist Henry George.
This made me curious about how an economist like you would assess the positive and negative aspects of his ideas. It might even be an interesting topic for a future video.
All the best, and thank you again for your engaging content.
Daniel
This is Georgism. It's cool, especially from a socialist perspective. Land value tax (LVT) is the biggest talking point. I'm laughing because this content creator is a snooty elite so I think what he thinks about Georgism is obvious.
Regarding the Spanish tax, until 2025 most wealth people were sheltered in Madrid region and there they bonified the tax at 100%. So they had to file the tax but didn't pay affecting the revenue. In 2025 the central government created another wealth tax that would go to them if they didn't pay anything in regional wealth taxes. As a consequence regional governments stoped bonifing the tax and revenue has increased.
The government takes more money, but all the public services get worse and worse every year and everyone but the retirees on whose votes the political parties rely on keeps getting poorer. And seeing the use they make of that extra money in prostitutes and drugs at best, but more often bribes and trading with immoral dictatorial regimes overseas, I think it's terrible they get any money at all.
@h.inusitatus EXACTLY the argument shouldn't be, they should pay more... the argument should be all of us should pay LESS!!!
@TheCostofAutism ofcourse a government also has its responsibility. Corruption amd inrfficiency needs to be looked at and we the people need to keep on being critical on our governments spending
This is something different than a wealth tax though.
I dont mind paying taxes if its well spend
So the actual point of a 'wealth tax' is to get a specific politician elected or re-elected?
Everyone who reads the Jakobsen et al paper overlooks the fact that Scandinavia's top wealth taxes are infamously low and flat. The claim that a one percentage point increase in the top wealth tax rate leads to capital flight is arguably misleading, because their top wealth tax applied to singles/couples with a combined wealth exceeding 1500/3000 SEK, or around 150K/300K USD.
That is... not very wealthy, and only middle - upper middle class at best. The tax being so poorly designed and falling on middle/upper middle classes was actually the main reason why it was perceived to be unfair and repealed in the first place. Completely different to the billionaire taxes on the ultra wealthy that is advocated by Zucman, and what is generally referred to in popular discourse.
ok well, Zucman's tax is going to make even less money if we're trying to narrow the eligibility of who has to pay such a tax. Look man, the idea that you can fund social democracy SOLELY off rich people with no taxes on the middle class is a freaking myth, especially if you're trying to replicate Scandinavian level services in other countries
But the claim is actually that not that many will leave.
As a language learner I think LANGAUGE is a important factor left out. Most of Scandinavian people can speak English fluently. It make it easier for them to leave to other places WHERE THEY CAN SPEAK ENGLISH. They moved to Switzerland and not Thailand and Vietnam. And you pretty much can live in an English bubble in Thailand and Vietnam. I can speak Vietnamese and that took me hours a day, every single day, for years. Countries like my country, Brazil, or Japan, where less than 1% of the population is fluent in English-let alone other languages- may have a much larger leeway. At the end of the day even for billionaires moving to a country with a language they don't know and with large cultural differences is a hassle. So the EUROPEAN UNION settling for some kind of fixed tax could have a bigger impact as well. We can pretty much round those billionaires up petty easily.
@MoneyMacro I think the claim is that they'll shift their wealth into illiquid and hard to evaluate assetts. Assetts whose value is very arbitrary...
It seems like a simple case of setting the right thresholds for the wealth tax to avoid harming the mom and pop businesses and aiming high on the uncertain valuations.
@MoneyMacro You're missing the point, ultra wealthy can much easier manipulate the wealth tax, meanwhile I have much fewer options to do so. So I end up paying a higher wealth tax than the ultra wealthy (in proportion to actual wealth/purchasing power).
Another separate point you never talk about is that a Norwegian owned company will effectively have a higher tax than its foreign owned competitor across the street.
You almost mentioned in this video but companies staying private also means the public can't invest.
You're going to have to explain 'leaving '. In the US here, I have an example. I knew a wealthy guy here in Ohio. In Florida, there's no income tax. In Ohio, there is. He bought a house in Florida as well as Ohio. As long as he stayed a certain amount of time of the year, he was a Florida resident. But his business was still in Ohio, as his house, friends and family. He was just like me except for the longer vacation. However he didn't pay state income tax while I did. Did those rich people in Finland and Sweden do the same and were not counted as leaving? Were they counted as left?
It's a good question. The eurozone kind of acts similarly to the united states in that you can be fairly mobile within the zone. For the purposes of this video he's saying left in so far as they were a tax payer.
I.e. if there was a requirement that you cannot be in Sweden longer than 80 days a year or you'd be considered a resident for tax purposes they would follow that rule.
The kind of arbitraging that' you're talking about is a little harder outside the USA though. It's possible they were doing something similar.
The rules are applied equally all over Sweden, so there is no moving around in the country to find better rules. You either leave or stay.
The main short comming of this calculation is that it only calculate the number of wealthy leaving and not their wealth. In fact the richer a person is the easier is it to leave. Therefore it is agruable that a wealthtax does not create any additional tax income. Secondly the study does not take into account longer term effects. Long term even more the rich will leave. This is why every wealth tax hurts a countries overall as well as the government tax income!
Looks like it's going to be pitchforks and torches then.
I'm already dumping the tea into the harbour
This comment deserves more likes. They are doing all they can to stay rich, why aren't we doing all in owr power to get out of poverty?. We already tried studying, and working hard, and it doesn't cut it anymore.
2:28 Yeah, but isn’t it kind of a culture difference too? I don’t know Dutch and Danish billionaires and maybe they’re not that different from American or UK billionaires but I feel like there’s some confounding there that’s not being taken into account….
One externality that was hinted at but not mentioned was control of a publicly traded company. If a billionaire has to sell stock in order to pay a wealth tax he/she may end up losing control of the company. Further incentivizing keeping or taking companies private. This would remove capital from the market.
4:34 I still don’t understand what’s the issue with “borrowing against assets”. Sure, you don’t pay taxes immediately, but key feature of debt is that you have to repay it. And to do it, you have to sell the assets, or give them away to creditor which is also taxable.
They don’t pay back till they die, and they can’t be taxed after death
@PreciousAyomiposi the assets can absolutely be taxed after death. Inheritance taxes do exist. The estate who holds the assets after the primary holder dies will be taxed on the sale of assets to repay any debts. These debts need to be repaid before the estate can bequeath the assets to kin. If the estate is in control and not the primary owner before death, then death changes nothing. That debt still needs to be repaid through a taxable event.
Most of us borrow against assets. It's called a mortgage.
They're borrowing against unrealized gains--book values of the assets. Then for some stupid reason, in the US there a "step up in basis" on these assets at inheritance so that they're "realized" by the heirs at the current value, not the original purchase price, so capital gains are avoided entirely. However, in reality, billionaires borrow against a tiny fraction of their assets to live on. Billionaires don't spend $50 million a week, they spend much less, so the taxes on that amount is not significant in the grand scheme.
@davidml1023
There are ways to dodge it
The bit about 54¢ lost to portfolio shifting and evasion for every dollar in wealth tax touches on the point that I routinely make about what I see is the biggest problem with wealth taxes — the valuation problem. Since high net worth assets tend to have a small market, the wealth tax increases the supply of such assets (in order to obtain cash to pay the tax) while simultaneously decreasing the demand for such assets (since nearly all potential buyers are also liable for the tax). This results in more value being destroyed than tax collected.
An important question here is, what is value? If a company creates the same products for the same price, employs the same people with the same salaries and so on, but their stock is valued lower, is the company less valuable? In some sense yes, but also, they create the same benefits for the society.
Personally, I think we should only take the "real" value into account when making political decisions. The second type mostly benefits very wealthy people, and frankly, I don't think we as a society should take rich people's well being into account at all as long as that doesn't clearly affect others, since they will manage better than everyone else anyway. The types of values can be hard to decouple, but in your example, it's quite clear. And yes, it's always a little more complicated, if the company wants to emit more shares or similar, but that's a separate discussion.
@hakuni123 the thing is, market capitalization isn't really reflective of the value of a company, but rather of market sentiment toward the company. Stock prices are merely a function of market cap and shares outstanding. That doesn't mean shares don't hold value, it just means that share value is distinct from business value.
It's like a house and a mortgage — their value is both linked and disconnected simultaneously. They're linked in that the mortgage finances the purchase of the house, but they're disconnected in that the value of the house is determined by its marketability, while the value of the mortgage is determined by the risk profile and profit margin.
I think it's important to remember that a lot of these sorts of assets also populate retirement and pension funds. It's definitely necessary to increase taxation on the wealthy in order to reverse the increases in wealth and income inequality, as a high level of wealth concentration is socioeconomically destabilizing. However, wealth taxes are an incredibly inefficient way to achieve this.
@hakuni123 I think OP's point is basically how do you value a private company.
Take supreme for example. In their heyday they were selling bricks, crowbars etc for tens of thousands of dollars. If you evaluate them just on their assets you supremely undervalue them.
But what is their actual value? Their brand? How do you quantify that into a number?
You can say they don't have value and they're just selling bricks to idiots but if the market is paying them to do that then they do have value according to the rules of capitalism.
How about having a regularized wealth tax?, having an agreement around the world.
Please do an analysis of inheritance taxes next. Love your work!
I really dont want to live in a world, where what I have earned for my children is taxed away for the rotten government.
@SunRunn3r to give away to foreigners
@SunRunn3r I really don't understand why normal people seems so bothered about it, no the small amount of wealth you will be able to accumulate to pass on to your children will not get taxed a lot, if AT ALL. No one wants to tax the inheritance of a single broke-ass house and car. Don't worry
@samu-ray560 The assumption being that no one is able to save up ore than 1 house and 1 car? If that was the world we lived in, we wouldn't be discussing inherent taxes in the first place
@BologneseBucket The assumption being that more than 50% of people would be lucky to even be able to save that much, especially nowadays. It's obvious that the inheritance tax would be tailored only towards the top 10% of any given country, so again I fail to see where the rest of the population would be bothered by this
If corporations want to be treated like people (and many argue they do), then the countries in which they operate and generate revenue should be allowed to levy a fixed income-related tax based on gross income. No ifs. No buts. Pay up.
Do this and you can say goodbye to any business with notable payroll expenses or other expenses not part of gross income. Might as well grow food yourself, since nobody is paying tax on $1mil in gross income before the $900k in payroll has been deducted
EDIT: I guess thats the point since if you shut down businesses with high payroll, nobody will be employed, and thus nobody can be exploited. We can all work on the black market and sew our own clothes. Pay up pay up!!!
Doesn't matter man. The problem isn't that the billionaires are not getting taxed enough, the problem is governments spend (and waste) every penny then have to borrow $2 trillion plus more every year. You can take all of Elon's $1T won't even cover the US Federal government for less than 2 months. Biden spent $6.75 trillion in 2024 and Trump spent $7 trillion in 2025. Add up all the billionaires in the USA and it still only covers 8 months in federal government spending. And there will be no billionaires left after the 1st year.
Low margin businesses will then be taxed at the same rate as high margin businesses.
@25Soupy "the problem is governments spend (and waste) every penny" Youre in denial about reality, only a tiny fraction of government spending is wasted, the vast majority is critically important.
"Add up all the billionaires in the USA and it still only covers 8 months in federal government spending. And there will be no billionaires left after the 1st year." I fail to see the issue. Shreading the billionare class so that common people would have 8 months of 0 taxes is an absolute win for commoners.
Governments will debate taxes forever, but I've learned I can't control policy I can only control how prepared I am. Sitting down with a fiduciary planner shifted my focus from reacting to headlines to building a tax-aware, long-term strategy that fits my goals. That doesn't eliminate uncertainty, but it gave me clarity and real peace of mind. I've found that protecting wealth is usually less about predicting politicians and more about making disciplined decisions before policies change.
13:07 that's so insanely myopic and un-thought-out
fix for "under-valued" or "un-valuable" assets: make the rich person declare a taxable value on their assets.
then every year a public auction can happen on their declared assets at 150% of the value they declared to instantly buy out the asset shares - including by public citizen funds.
undervaluing your private assets? you will be disowned by the state lol, ripbozo
don't want to have the risk of being disonwed? you must consent to a state or public citizen referendum in the local area where your business is registered to evaluate the business for 12 months at a time.
there are many ways to combat cheesy attempts to avoid taxes, it's just that the exact people that evade taxes are the ones paying lobbyists to fix the system for them.
wealth taxes are becoming a thing, everybody is for it, they can't be stopped, all over Europe it's starting with a movement, and as the old boomers are dying out that keep voting for the same corrupt parties, it is getting harder and harder to avoid this truth for the elites.
so what if they end up fleeing the country/state?
now: wealth -> hands of a few rich
then: wealth -> hands of the people & the government
oh no, a tiny bit of state income (<0.5%) and some companies are affected, while the overall wealth accruement and income of everyone goes up - and new company opportunities open up for sensible, moral, non-psychopathic companies LOL
I guess my biggest question is, who decides what is “fair.” My guess is there are wildly different ideas on “fair.”
Some people think feudalism is fair. Some people think ordinary people are just peasants that need to eat dirt. Some people think that it's fair to play a game of monopoly where you only get to participate after someone else owns all the houses and hotels.
We all know what it means to them - Fair = More for anyone that has more than me.
"Fair" is basically the concept of applying the same rules to everybody. But when it comes to taxation, that doesn't work. There needs to be intentional and targeted unfairness to help the poor get along as well as prevent the build-up of levels of wealth that are useless or even detrimental for society as a whole.
Fair is a lie we tell kids to get them to stop fighting. What is important is causation and what's the goal state. There are some people that want there to be minimum poverty and for the citizens of their country to be in community with each other and support one another, and there are people that just want theirs and the law to stop others from taking it.
@ThomasNux The richest people in europe pay half the effective tax rate as the middle class. You have to do a lot of mental gymnastics to see that as fair.
I think there is a missing layer of complexity when trying to understand how how many wealthy will leave, and this is the cultural/familial/economic tie to the country applying the wealth tax. Essentially the domicile. Some old money wealthy individuals are deeply routed to a particular country, and others are multinational in their background or lifestyle and have no issue switching to another better location.
Denmark and Sweden have a generally low percentage of foreign born wealthy, whereas the UK has a high percentage of foreign born wealthy. I therefore think a much higher percentage in the UK would leave than a country like Denmark, as we have seen when the UK changed the non-domicile remittance based taxation rules recently, and it would have a more negative impact on the UK than other countries, since it basically has a more international wealthy class to begin with.
Yeah it's weird and interesting. How much is being in Denmark worth? Can you be a dane anywhere else? Access to cultural and civil liberties and a stable society are premium.
That's an interesting point but in many ways I'd argue the opposite. If you're an indian billionaire for example there aren't that many safe countries where you still have a large indian population. Probably just UK, Canada and maybe Australia. If you want to send your kids to a good private school, good university and have them grow up in a safe country without losing their heritage then the UK is a really good option for which there are few alternatives.
Thanks for the follow up!
How about reduce spending and let the free markets create. Crazy I know.
Here in the UK liz truss tried that and the markets said no thank you.
Wages over time have a surplus. Surpluses that are invested create growth — as they should
Where is the surplus? Is it in the room with us now? Rent, inflation, and wage stagnation have been choking out the surplus for as long as I've been alive.
@LiaEAif you are a low achiever you’re wages never rise beyond inflation
very useful as always. thanks
It seems like the so called "problem with wealth taxes" might have some upsides too. For example, if the ultra rich move their money out of taxable properties, that should reduce demand for housing and decrease prices for all. That would lower income from property taxes, which would be interesting to analyze
Billionaires moved their money out of taxable properties in Venezuela, Kuba, East Germany. Look at how buildings look there today.
@davids4227im not knowledgeable on the subject, but it looks like the cause of a lot of the issues are poor building codes, corruption and economic instability. Im not an expert on the subject, so if there's more insight into this issue, im always interested to learn more
Here in South Florida, we went from under 3M people 40 years ago to nearly 6M people today. The Population doubled.... adding or subtracting a Billionaire isn't going to change that. The reality is that if you look at every single place that properties have skyrocketed, the ONLY reason it happened was because A LOT of new people moved to that area.
@TheCostofAutismThere are investment companies that buy up a ton of properties as investments. Changing how investment properties, as opposed to primary residences, are taxed absolutely can provide immediate relief to housing markets. Further, it also deincentivizes construction companies from focusing on impractical luxury homes that are largely there to appreciate wealth not house families.
Yeah I'm sure the vacated mansions will magically decrease the prices of 2 bedroom flats. Great logic.
No mention of exit taxes?
While it might work in extracting the money, that's extremely draconian and will make all billionaires wary of ever moving in your country.
Exit taxes might be effective. We don’t really know long term. It might just drive people away earlier.
But also I couldn’t imagine a more dystopian view of the world.
It’s like north Korea lite.
And then you get just normal middle class Canadians for example that may want to live somewhere else and they gotta liquidate everything for pennies on the canadia dollar
@lucakrokrowinkel9576 North Korea to pay 2% exit tax? That's some my latte is luke warm kind of rights violation there. You mean I have to pay for all this infrastructure and services? Communism!!
Any country or state that is implementing exit taxes is a country or state already on the decline. It will not save them but hasten the race to the bottom as more people flee. The middle class is who they end up taxing to make up the difference.
The cost of running these wealth taxes is far more than other types of taxes. The government has to do a financial audit of these individuals (and their complex net worth) every year.
Since IKEA was mentioned its founder Ingvar Kamprad moved to Denmark in 1973 to avoid High Swedish taxes. Danish taxation at the time was lower than the potential 85% he faced in Sweden, but stillsubstantial. So in 1976 he not only moved to Switzerland, he also created a convoluted corporate structure involving the Netherlands limiting his corporate taxation to a fraction. He did not move back to Sweden until 2014 when wealth and inheritance taxation rules had been scrapped.
One thing the Danish election for 2026 did not mention during its wealth tax debate was consumption. Wealthy buy expensive cars and big houses that is also fueled or heated by high taxation energy. Only looking at the potential wealth tax revenue VS the wealthy fleeing the nation overlooks that there is potential loss of the amount of money circulating in society, that at least receives a 25% VAT rate for Denmark.
And your analysis overlooks the negative economic impact of wealth inequality. 🤷♀️
Having extremely wealthy people have many destructive externalities. It's also been shown that wealth predictable makes individuals less humanitarian and altruistic. They become more selfish. Leading to ever increasing negative externalities.
Also, any VAT the rich pays on luxury wares would end up in circulation ANYWAY if that money were taxed and then used by the state to invest. The only difference being that the VAT would be payed by less wealthy people on average.
Some people believe that billionaire entrepreneurs create wealth in excess of what the state could create with the money it has taxed, but many investments the state can make have greatly positive effects on the efficiency and growth of the economy. I have not seen any evidence that money in a billionaires pocket generates more money in the economy than when the state spends taxed money.
The fact that billionaires can threaten to run away with their wealth is an argument FOR a wealth tax. The state shouldn't let the billionaires hold the state hostage.
@Coburah So you're just PURPOSELY excluding the US and China from your calculations? Lower taxes on capital produce noticeably better living standards. In 2008, the US and Eurozone economies were equal. Today, the US economy TWICE Europe’s, and the median US household income is DOUBLE the EU's. When you tax billionaires on paper wealth, you drain the private cash pools used to BUILD, meaning less money for new factories, warehouses, and jobs. Instead, the state takes that money and throws it away on bloated bureaucracy. Look at Europe's MASSIVE "investments" in energy: You paid for it via tax THEN, pay 35+ cents per kilowatt-hour for electricity. Meanwhile, in Florida, the government doesn't build the power plants, it's all private! The result? We pay around 13 cents per kWh. Private capital builds a better, cheaper society than government handouts ever will.
This was interesting info, thanks.
I will say that we shouldn't consider how much money the wealthy spend as being substantial, because even though they can buy a lambo and spend millions, thats absolutely nothing compared to how much wealth they do have sitting in other places.
Moreover, as their wealth continues to grow, theyre looking for mire and more things to buy, like housing, which has contributed (though it is not the sole cause) to the increased price of homes, making everything more expensive.
They use private equity to buy companies, then jack up costs and consumer prices until the business ultimately fails. A yacht or ten being bought by one person is so fundamentally different on money's mobility than ten million people each spending in their daily lives.
@Coburah Whilst state investments can have positive effects, very much is wasteful and the state is very good at destroying value in the pursuit of ideology.
Very good analysis, thank you for sharing this. But didn't you miss the fact that the number for billionaires leaving is per year? It is not a one-time effect as I understand it. It adds up over time (as it should since new billionaires are hopefully created every year). So revenue from capital gains tax (which these people also pay) could possibly decline over time. Implementing a wealth tax might increase government revenue this year and the next, but still decrease it in year 10.
New billionaires are created and some immigrate.
He completely missed both of the ways that Warren Buffett's statement was not true. First, it's impossible to never pull money out, especially if they're living luxurious lifestyles. Second, and more importantly, they own businesses, and those businesses pay taxes, so their assets are already taxed before they ever withdraw a penny. Good summary of the paper, but the paper itself starts with the false assumption that only direct taxation matters.
@Parz314 Nobody has ever argued there is never tax paid by people like Musk though
What you're discounting is how much control over they have to minimize it.
Sure, we might not have full studies of Musk's lifetime paying, but so far you can bet your life on that his lifetime effective tax rate is a lower percentage than say an NBA player with a 7 figure salary.
The argument against billionaires paying lower taxes isn't even always about being fair to the poor, it's being fair to the HIGH earners. In US for example, I'm a top 10% earner and my effective tax rate is probably in the 35-40% range overall. There are people in the top 0.001% that pay a lower effective tax rate than me on a number of years, guranteed.
I see you have difficulty with reading comprehension, because nothing you said is relevant to my comments.
We're talking about how wealth is taxed, and they already talked about how people like Musk leave most of their wealth invested in ownership of businesses, avoiding selling those investments in business ownership, which is counted as income in that year.
The point I made was about how that wealth is already paying taxes every year through business taxes. If we're talking about wealth being taxed, then we need to include the taxes paid by the businesses that constitute their wealth. These taxes, though a primary way that wealth is taxed, are regularly ignored in the discussion of how much wealthy people pay in taxes, including the paper discussed in the video.
Tldr: Ignoring a primary method wealth is already being taxed doesn't make for accurate measurements of how much wealthy people pay in taxes.
@Parz314 Effective tax rate is lower for the very thin slice at the top no matter how it's sliced. There are numerous ways. You can literally talk to wealth management folks that will tell you their job is to help the wealthy save taxes.
This isn't debatable and simply backed up with statistics, but you can keep dreaming the ultrarich pay their share
The only people that pay too much taxes are true top earners, think doctors/surgeons/sports stars.
There's a reason why people like Trump has been pushing to increase estate tax exemption. You can also easily google how estate tax is often avoided or at least, reduced significantly. Nobody is saying Musk NEVER pays a dime of taxes, we're talking effective rates.
What both sides lack is the context, timeline, financial structure and tradition.
Since abolishing gold standard central banks and authorities had one job and none of them got responsibility for anything, unless there is a new bill to approve to spend even more.
The one country this could make a huge difference is US. US unlike all other OECD country, tax by citizenship not by residence. So if Elon wanted to dodge the new US federal wealth tax, he not only have to move to Cayman Island, he would have to renounce the US citizenship. And IRS could slap the wealth exit tax as well as setting higher wealth tax rate for non-citizens to combat this. Plus renouncing the citizenship will have downsides that they cannot mitigate like SpaceX might have harder time getting US DoD contracts etc which will bring down the value of those assets for Elon.
Insane model....
@El_Comandante_Akshually neoliberal shock therapy is even more insane, we fully deregulated our finance & state economy, leading to the ef up that is the 21st century
@El_Comandante_Akshually Why or what is "insane"?
So you hurt Elons ability to return to the US, you hurt Space X ability to bid for contracts! Next? Space X fails, US workers lose their jobs and the US loses the ability to innovate in the space industry!
Seems regressive to me just to reap a tax which effectively becomes a 'one off' money grab.
@bogman7474711 if all of usa can only produce one firm able to go to space, we have a much bigger problem than unemployment, that is a chronic lack of human capital, capable to lead us into the future...
5:40 a lot of countries have an exit tax.
That's a pretty nasty. Imagine Disneyland wouldn't let you out unless you buy some of their merch
You mean like uber tripling their price when you try to leave Disneyland? Funny thing is, its still cheaper than renting a car if you flew there. 😂@dfsdgmythtrvvbyrtr
which is fucking awful
@dfsdgmythtrvvbyrtr usually how it works it looks at capital GAINS, and then taxes it like income. This basically makes capital flight impossible no wealth tax will ever cost you even remotely that amount of money.
Just the name should show you how greedy that tax is.
Thank you for bringing nuance and data to the debate
I know this is an economic channel, but billionaires/wealth hoarding is an economic issue in the same way that crime, education, and healthcare are economic issues: the dollar amounts are not the most important thing, the effect on society is. Imagine a society in which billionaires and their companies have relatively little sway over politics, don't write the laws, and receive the same justice as common folk. Even if the tax code was as favorable as it is now, society would work better for the majority and people wouldn't be so angry. Conversely, as long as governments are easily corrupted the people at top are going to do it, even if they're taxed all the way back to being only millionaires. I'm not saying the analysis is wrong or there's an easy fix, just that we shouldn't get pigeonholed into thinking that x amount going in or out of an economy is the goal.
Agreed
Even if they didn't buy up politicians, if people are free to get indefinitely rich, they would still end up gradually buying up everything, one asset after the other. We cannot phisically have very rich people, they will own everything at some point
If the government's laws favours billionaires, then wouldn't more power to the government favour billionaires? Wouldn't billionaires have even more of an incentive to lobby the government if more of their wealth goes towards the government? You've got the same idea as Bernie Sanders; the government is corrupt therefore we need more government.
If we can't get past the task of putting figures on this issue, we're just going to watch our democracies, societies and our environment crumble.
If they were taxed back to being millionaires they wouldnt have these huge slush funds for lobbying and media campaigns... Corruption will always exist, its politicians weighing up a bargain, their credibility vs the offer.
There is a problem with base concepts here. Taxing wealth is different than taxing the wealthy. A progressive income tax will tax the wealthy, using measurable data. Unrealized gains won't be taxed, and an ultra billionaire can dodge taxes in his lifetime simply by borrowing living expenses. But the billionaire doesn't therefore have access to the great wealth he has accumulated. When he dies, the debt comes due, and inheritance taxes on the capital gains to the heirs will collect the actual tax.
Doesn't inheritance tax run into the same problem of relocating wealth into non-taxed assets and commodities? Like you could spread it across rental properties and then the properties can be sold to collect the wealth for example?
The wealthy don’t have income, an income tax just doesn’t apply to them.
Income tax doesn't tax the wealthy, it taxes those with high incomes.
@steemlenn8797 So, is your goal simply to take from those who possess something?
@messierchicken Then why do you want to tax them? Having a pile of something that doesn't do anything does not require resources of government, so should not be taken just because other people want it.
Very well explained … we’ve heard so much about this in the UK from the Left in the UK …. It’s good to understand it more
It would be interesting to know what the tax revenue generated would be after the costs of administration of the wealth taxes are taken into account.
I don't get it. Why not just figure out a way so that billionaires have to pay themselves dividends and cannot borrow against their wealth? Wouldn't that be the best solution?
you can do it but this doesn't make nearly as much money as people think it will.
Another point in these types of videos I don't see brought up often, is that (at least in the US) whenever a new tax is introduced, even if it justifies itself as taxing only the wealthiest amongst us, they end up expanding and increasing, incorporating more and more of the middle and lower classes eventually. Which may be more to the argument that the real solution to 'fairness' is to plug the exploitable holes in tax code, not just keep adding more on top.
When these super wealthy borrow money at low interest rates against their stock and assets, it should trigger a taxable situation for the amount borrowed
… land value tax and serious inheritance tax would take care of most of the issue…
@MoneyMacro - 2026-07-03
Check out our advertising sponsor, The Economist, and get access to global coverage at an exclusive 35% discount at https://economist.com/moneymacro
@MoneyMacro - 2026-07-03
Recommended follow-up articles:
1. Gabriel Zucman makes the case for a billionaire tax - https://www.economist.com/insider/ins...
2. Don’t tax wealth - https://www.economist.com/finance-and...
3. How much tax should the rich pay? - https://www.economist.com/insider/ins...
@YukarioMashimato - 2026-07-03
You should check out the studies from the United States. It's easier to move between states than it is between countries. In the states companies and owners physically move between states.
@UKEconomics - 2026-07-03
Wealth tax is a big debate and to be blunt there isn't a clear answer. We tax income? Then billionaires can dodge it by holding assets. Tax assets or wealth? Fine they just leave to places like Monaco.
Now funny thing, in my opinion, it becomes extremely hard for a company to suddenly change its operations from the UK to a place like Monaco or Dubai. The best way I can see us effectively taxing HNWI is by producing such a strong incentive for these people to stay in the country. In the UK it could be an access to a highly educated workforce that operates in the centre of the world. Or in places like Germany a billionaire might be incentivized to stay due the highly specialised workforce in the automotive industry (for example).
Regardless, as much as people hate to say it, we need billionaires in every powerful economy as most likely they are the biggest providers of jobs and opportunity. But in order to tax them, we as an economy need to give something extremely valuable that can't be found any place else
@RosoneandWatson - 2026-07-04
If their wealth goes down one year, can they get a wealth tax deduction or return?
@RosoneandWatson - 2026-07-04
You should do a video on California and Washington State, who have seen so many high income earners leave that its created multi billion gaps in their budgets.
In IL, when Ken Griffin and his company left Chicago for Miami, they lost % of the state budget in a single year. It's worth looking at.