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.
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...
Whatever you tax, you will get less of and whatever you subsidize you will get more of.
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
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.
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
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.
More like 80-90%
Owning a house freehold wipes out a huge portion of outgoing rent, me and my brother live together in our mums old home and have nearly paid off the mortgage, in just over 1 year I will have 200$ more every week. Sadly we need to fix the roof so I may need to remortgage a bit. Regardless the security (of not being evicted) and freedom of making unrestricted renovations on the house and garden, not living in a rental is definitely worth it. We will never own our own homes with the way the economy is going but we are grateful for what we have, im 33 he's 36 and yea most of our earnings were spent on rent, food, power (never owned a heater or electric blanket) internet, fuel and car maintenance, insurance, the more I think the longer the list gets
THIS is the major point! And i hate that people never talk about...a billionare will not consume the same amount of goods proportional to his wealth as an average person and this is responsable for almost all problems with disproportional wealth concentration...a average joe will consume 1 loaf of bread a week, does Eloh Musk buying 1M loaf of breads a week? NO...than how is the bread maker making money proportionally to the big pie of the nation economy? by raising the price of bread...yes this is an over simplification...but that is the general idea.
@MrRafaelRGO But isnt that good? That means he has more money to invest in things whitch means more growth
@falehaldosari7916 Sure...he will invest into Data centers while everyone struggle to buy food, makes perfect sense...Growth which are basicaly show as GDP is an horrible way to look at an country economic "health", a simple example can be found in most industrial cities, where the average earnings are extremely high, but the city is usualy a shitty place, cause the reality is that most of that capital is going to very feel that don't even live there.
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.
"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.
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.
It would be worth considering that the Sweden and Denmark billionaires would be made up of a higher percentage of homegrown rich than the UK. The UK has attacted investment through reducing the Corporation Tax rate since 2010. An act that saw Corporation Tax take exponentially increase over time. Companies that came to the UK easily by simply switching their HQ for tax purposes, can easily switch it out again, as can their owners for the same reason. The world is more mobile than it was in the past.
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.
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.
Anything left of center today is a disaster
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.
12:00 This is not how it works. Taxation is not an on/off switch. Most of the time taxation is already in place at a low percentage. And every time the government raises the taxation, more people leave. This threshold is different for everyone. Just introducing taxes as a low rate will not make people leave. But more and more people when you keep raising taxes.
When the government would introduce a new tax and directly with a high rate, there will be a large group that starts moving. That's why government choose to raise taxes step by step.
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 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.
I presume the attorneys fees to restructure to avoid taxes are tax deductible. Maybe we could just have smaller governments..
I used to value estates for estate taxes. It takes 6 months and tens of thousands of dollars to estimate the net worth of someone with $100 million in assets.
Thank you for covering this topic. I have the feeling many people haven't really thought about a) what types of taxes and b) how much the tax will make when talking about taxing the rich. Nice to see this video covers both.
I would only add that once in place the definition of rich will likely change (especially when governments see the sub 1 % increase in budget) and especially when taxing wealth even small companies will struggle.
New York would be a better example of this. They’ve hammered businesses with so many taxes and business disincentives, and so many businesses left, that now 50% of tax income comes from 7 companies. The hole left by the vanishing companies is already massive and growing…
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
@TheCostofAutism Then you no longer get government funded healthcare, transport, etc. Revenue will shrink even more over time due to lack of enforcement. And if you are in a field that doesn't earn a high wage then damn thats a shame for you.
If you want a case study on the result of exactly what you're proposing, check the US and the deteriorating services in the UK since Thatcher, this has been tried before, now these countries have collapsing wellfare states and are drowning in debt because they privatized everything to pay for these tax cuts
@heart4740 I call bullshit. Look at NYC, they have a GIANT deficit, looking to raise more taxes, more taxes, more taxes. Here's the kicker. They actually have a BIGGER budget than THE ENTIRE STATE OF FLORIDA! Florida's population is about 3X HIGHER than the city of NY. As a matter of fact, out of all 50 States, NYC spends MORE than ALL except CA, TX and NY State! Just goes to show you that NO MATTER HOW MUCH these governments have they will spend it all then complain they need EVEN MORE!!
In Norway if you have a small, 1 bedroom apartment you have to pay wealth tax😢
Exactly. back when it started - early 1900s - it had a threshold of 11M NOK, it is now 1.9M NOK.
More importantly its what the government does for its citizens with the tax money that matters. The Scandinavian people enjoy a lot of benefits for the taxes they pay.
@cp3190 the fact that it goes through a governmental dispensation process means
1. less money is spent on the citizens than if they had spent it on themselves
2. the government can decide who and what they spend it on, instead of the people earning the money in the first place - the citizens have no say
3. government spending is the problem, not the solution.
4. the benefits are not equally distributed
It would be like saying "that thief stole $40k from you but look, he bought you dinner! and paid for that person's complete grocery bill and rental for 3 years", and you are here applauding the thief and his right to steal the $40k in the first place, saying "but the thief bought you dinner!."
It's puerile.
@cp3190 Are you crazy?
@aaronchristiansen5774 Thats your problem. Not every govt is corrupt like the US govt. You are only allowed to make any money thank to the govt protecting you other wise you would be a worker for a feudal lord.
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.
Attacking the most productive people all for a virtue signal is nuts
@Karlcbr1000 1. Why is trying to get the rich to pay the same effective tax rate as everyone else attacking them? Is income tax attacking you?
2. The people included in the tax proposal aren't neccesserily productive. Is a landowner who inherited a massive estate productive? Are they making the best use of that land? Probably not.
Please don't waste everyone's time by misrepresenting the arguments in favour of a wealth tax.
@counterpigcounterpig581are you really this misinformed? Really? The top 25% of income earners pay the overwhelming majority of the taxes (85%).
It’s not true that the middle class pays more taxes. That’s a flat out lie.
The Netherlands has wealth tax as their so called box3. And that’s not just for billionaires, but for everybody. Whatever you earn on your equity, or just have e.g. a second house, you pay a fix made-up amount of tax over that equity. What happened over the last 5 years: people who rented out houses started to pay tax over their property not rental income which was (equivalent) about 60+ % over their actual income. And they could not deduct any repair costs of any kind for these rental properties. So that’s about the worst investment construct one can imagine. What did landlords do: they sold their properties. The remaining landlords could therefore raise rents for new renters substantially. Due to that the extreme socialistic Dutch government wanted to limit the rent increase for new renter as well. ( there was already rent control for existing renters). So the government is extending their “total control” even further.
Note: these landlords often had to become landlords as an alternative for income when they retire. As they didn’t get/ have a pension. So basically the Dutch government taxed that type of alternative “pension “ income by 60+%.
How nice huh? So far I haven’t find another country who does that.
Now the amount of available rental properties is way too low. Hence they think “now what?”.
Basically the Dutch government is slowly leaving the capitalistic concept of supply&demand and become more like a community/communistic driven government.
And we all know how that goes….
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.
True.
But main taxes are defined by cantons - wealth tax maximum percentages are between 0.13% and 1.01% depending on canton.
Net wealth limit for taxation varies also depending on canton, now between 80'000 and 125'000 CHF.
There is no wealth tax at federal level.
An unfair taxation is done by cantons allowing tax deals for mainly very wealthy moving to Switzerland without "working" there, lump-sum taxation rather than world-wide income and wealth.
Interestingly the VAT rates in Switzerland are set in the federal law - and every new law, every law change can be subject of a vote, must be submitted to a vote if requested by collecting enough signatures within 100 days following official publication of a law.
Reason why VAT rate currently is at 8.1%
What you fail to consider is how many people avoid investment there because of high taxes.
@Karlcbr1000 and that's the rub. Too many people only look at the equation from one side. If a government doesn't have a business friendly climate, they won't attract capital. People need to look at it holistically.
@jasondashneythere’s no rub. There’s only what works and what doesn’t work.
Nothing on the far left of politics builds a stronger nation.
@Karlcbr1000 there’s always a rub. It’s like the Thomas Sowell quote “ there are no solutions, only trade-offs”. Trade-off are the rub.
Not mentioned was how the rich would accumulate the money to pay their taxes. They would have to sell shares, which decreases the value of those shares so that should be factored in. Also, who would buy the shares? Answer, other billionaries. Then you would have to ask if the government would apply resources to problems at the same efficiency as the private sector that generated the in the first place. I think we all know the answer to that question.
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.
And government waste and corruption and spending on wars and drug wars and useless military projects…etc.
Am I the only thinking why the fact that Switzerland did bring in a significant 6% as per the graph at 15:30 is not even mentioned? Why is that one more successful?
We don't need more taxes. We need more and better control of spending.
It’s amazing how most of our spending will soon be interest on debt and nobody cares in Washington.
Yes, states should spend only their fair share.
@firstlast9916 Citizens keep asking for more stuff. Saying "Yes!" gets you elected. Saying no gets you called names.
The current trajectory of debt is unsustainable in most western countries. That is how they are going to complete the shift to Socialism.
No you don’t. There is not that much fraud or waist. You need less expenses. Who do you want to leave in the gutter?
Do you agree or disagree that spending needs to be controlled? You seem to be saying both at the same time? Language barrier?
5:58 "emigrate and take the company with you" - possible, but only if you have a sole proprietorship or if it is not a problem for you that you will have to build a staff from scratch in a new place where you have to manage all the regulations or at least have a new legal and accounting team
Good luck taking the bay area companies like
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….
If all western countries had significant wealth taxes at the same time, the rich would have to decide if they are willing to leave. When leaving means going to some no-name island, or Africa or South America(no offense to these countries, but they aren’t Switzerland) then maybe they don’t want to leave their posh neighbors. They can afford to live anywhere, but they can’t show off anywhere.
In the United States, one does not need to move to another country just another state. California has seen an exodus of financially well off people and even large corporations moving to other states with better tax systems. Some just move to the next town over. Seattle has seen an exodus of not only wealth but also corporate businesses moving next-door to Bellevue. I make less than $100,000 a year and even I don’t want to live in a city and or state that has a high tax.
you need to also consider the enormous opportunity cost of transferring money from the relatively efficient private sector to the typically dysfunctional public sector.
You forgot to mention that you also need manpower to enforce this and do the research, all of which costs money and resources which is gonna further reduce the net positive of a wealth tax.
I'd like to see the impact of wealth taxes on the development and start up of new companies, the effect of said billionaires not expanding their businesses further or as fast, etc etc. Also side note, but appreciate how you included nice pictures of politicians on both sides. See way too many videos where people put in crazy farage or polanski photos to "improve" the validity of their economic arguments.
Billionaires not expanding their businesses further would allow other people's businesses to start and would be a very good thing.
@personzorz I am so confused, is this some 4head argument that its best to start a business during a recession? Does it cash out to any specific belief? Is it better to start a company in Venezuela than in the US because of less competition? What predictions does this "closing big businesses is good" theory deliver?
@Fadeways Go to bed Jeff
The whole basis of the video assumes that the goal should be to equalize outcomes. Like it or not it is the simple opportunity to achieve wealth for an entrepreneur that drives the economy and creates wealth for everyone. Something not addressed by this video is the warning issued by Friedman', “Economic freedom is an essential requisite for political freedom.” He ties the ability to earn and control wealth to personal autonomy, suggesting that restricting economic liberty, through taxation and intervention by the state, undermines other freedoms.
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 media and politicians frame this topic as a tax on billionaires, when in practice, it is on ordinary business owners.
These less wealthy business owners will not necessarily leave the country, but they will absolutely cut back on investment and avoid some speculative business activities when the return is not worth the risk.
Wealth taxes make growth a liability and are a disincentive to business activity.
Actually if the tax is on owners and not companies, they will give less returns and reinvest more internally in the companies. They will still get returns in the form of privileged "salaries" that are many many times higher than what your regular worker gets.
8 billion pounds will never fund 8 battery factories six clean steel plants and other stuff. Northvolt in Sweden burned through 10 billion pounds and was a failure. Stegra (or whatever it is called at the moment) will likely cost at least 8 billion before it starts production.
The issue is that the billionaires who relocate are often the most innovative and value-creating individuals. This departure has a compounding long-term effect, stifling innovation and competitiveness. This situation can lead to outcomes similar to present-day Europe, which is seen as less significant in global technology and innovation and struggles to prevent brain drain from causing complete decline.
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
@Karlcbr1000these "low achievers " are now almost the entire middle class, and they are tracking the flights and transponders of the yachts. Blades are being sharpened.
@jsh111people of your leftists I’ll are so misinformed. The middle class is largely irresponsible with money.
Go watch financial audit with Caleb hammer. Most of his guests are ridiculously irresponsible with their money.
90% of American millionaires are self made buddy. Billionaires employ millions of people and create billions in taxes.
All of your hate is so pathetically misguided.
@Karlcbr1000that's bullshit lies. We'll be seeing you at the chopping block, or walling in your bunker ventilation with concrete. Enjoy your time while you've got it
That study is nice and all, but it’s comparing countries where the population in general thinks the government spends the money wisely.
Why not both tax the rich and spend wisely?
Or is this against some idelogy
@muysli.y1855 You misunderstand, I’m just claiming that how people react to taxes is related to the opinion they have of the government.
If you think your taxes are generally being well spent, you might consider staying, even if it’s a cost to you. If the government is full of blatant corruption, inside dealing, etc… I’m guessing people are more likely to leave than to just accept that blatant thuggery.
If that’s true, the conclusions of the study only apply to places where the people think the government spends more or less wisely, since that’s true for both of the countries in the study.
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.
9:20 I think there is an error there. 4% of billionaires leaving is not the same thing as 4% of capital leaving.For example, in France, if only the Arnault family (LVMH) leaves, it is more than 10% that leave at once.
“Pay their fair share” is a stupid, undefined phrase.
Beyond that, the rich contribute to the economy much more than others. Tax is merely contributing to government. The former more than balances out the latter.
@craigjohnston7143 on the other hand, they lobby the gov to their own interests. double edge sword.
Well they have more, so they should pay more, don't see how that is stupid. It is fair and very logical. it does indeed not define exactly what that fair share is, but it is implied that it should be more rather then less compared to a middle class or poor person.
They also benefit form the infrastructure, social services, education, utilities, ... without which they could build their wealth in the first place. Plus its just a moral thing to do, help those who need it, when you have more than you could ever spend in your life.
@jcmaxwell3610 No, "fair" implies equal compared to everyone else.
If you and 9 friends go on a road trip, all of different income levels, and let's say it's going to run 15000, either each person pays 1500, or each person pays relative to their income. Someone making 50000 versus someone making 500000, the latter would put in 10x that of the former in absolute money, but be relatively the same as a percentage.
What would be weird is the 9 friends telling the richest one "Hey we want to go on this trip and you're paying for the whole thing," which is what the advocates seem to want.
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.
Norway has a wealth tax and one of the healthiest start up scenes in the world due to having a state owned vc company investing in just about anyone with a sensible business plan, so there are solutions there as well
@heart4740 Tax funded startups? Sounds like a recipe for corruption.
@agaace You'd think so, but it really isn't an issue
@heart4740 if by "one of the healthiest" you mean #27 on the global list, then your definition of "healthist" needs A LOT of work.
@aaronchristiansen5774 By what methodology? Because it's number 10 by start ups per capita. So what methodology makes it number 27
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.
Is it the "tax of the wealthy" or the attitude toward the successful and wealthy that drives people away?
Europeans are already losing most of their would be billionaire creators to the US, so they might as well go ahead. But the contribution of new company creation (and the resulting Billionaires) to the US economy has been quite large and is clearly visible when the two are compared with each other.
Billonaires come here for taxes but billionaires exist because of others talent. The US has lost so much talent over lack of funding to other countries. One guy with a pile of money does not equal inovation.
@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.