“A Billionaire Tax Is Not Radical”

“A billionaire tax is not radical.” That is the central argument from economist Gabriel Zucman and representatives of Sweden’s Green Party, who say the country’s tax system reverses its usual logic for the super-rich.

Sweden’s progressive tax system covers 99% of the population, with the total tax rate rising gradually from about 40% to 55% as income increases, they write. For billionaires, however, the rate falls sharply. Sweden’s richest people pay a total rate of less than 20%, according to the debate article.

The authors link the difference largely to the use of personal holding companies. For most people, income from wages, business profits or asset sales passes through the tax system before it can be spent or saved. A personal holding company, they argue, can function for billionaires like a tax-free savings account, allowing them to avoid declaring income in the same way as other taxpayers.

They describe that arrangement as a loophole that the United States identified and closed in the 1930s. In their view, the unequal treatment weakens the tax base and public trust, while forcing other taxpayers to contribute more to cover the resulting shortfall. They say the money could instead support higher child allowances, better primary care, railway construction and climate-transition investment.

The authors argue that taxing billionaires more like other citizens would be neither radical nor unfair. They point to international debate over the idea, including a proposed one-time 5% tax on California billionaires’ wealth, which residents are due to vote on in November, and a 2% minimum tax on the wealth of France’s richest people that passed the National Assembly last year but was blocked afterward.

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It is not radical to think that billionaires should pay tax like everyone else.