Wealth Taxes, Socialist Ideology, and Absent Economics

In these times of runaway public debt and perennial crisis in public finances, the wealth tax is a bad idea that just won’t go away.

Just a year ago, the prudent Swiss rejected a steep inheritance tax. France—thanks to political machinations in a hung Parliament, rather than deep conviction or prudence—rejected the resuscitation of its failed wealth taxes (1982-1987 and 1989-2012). The U.K. floated a similar proposal, which went nowhere. Since 2022, Spain has had a “temporary solidarity tax on big fortunes.”  

Alas, this is not just a European game. New York City Mayor Mamdani has proposed a special 2% tax on those with annual incomes over $1 million, in addition to the new pied-à-terre tax on high-value secondary residences. His proposal includes an increase in the city tax rate on corporations (to 11.5%) and top earners (from 3.9% to 5.9%, on top of the state’s general income tax and a temporary 10.9% tax on the Empire State’s top 5% of earners). California is proposing a one-time 5% wealth tax on high-net-worth individuals (Proposition 40 will appear on the November 3 ballot). Massachusetts has had a wealth tax since 2022. Nationally, wealth taxes are routinely floated but have not (yet) been adopted.

The wealth tax is a bad idea, as I explained in August 2024. Unfortunately, it is a bad idea that just won’t die. I refer the interested reader to arguments against a wealth tax, rather than repeating them here.

Perhaps the main problem is that bad policy proposals are being driven by bad economics, with the imprimatur of high-profile scholars. 

Gabriel Zucman

One such activist is Gabriel Zucman, who recently released another book to justify a wealth tax. The timing (late 2025) on the original French version was no coincidence, as the French Parliament was debating the adoption of a wealth tax. Parliament was engaging in a desperate attempt to fix public finances, where it couldn’t raise other taxes or cut social benefits without incurring popular wrath or a vote of no-confidence for the prime minister of a shaky coalition. Zucman failed to get the wealth tax passed. But he has garnered the honor that every economist secretly craves: an eponym. We had Smithian sympathy, Ricardian equivalence, the Keynesian cross, the Tullock trapezoid, the Hayek triangle, the Pigou tax, the Misesian dynamics of intervention, and the Alchian-Allen effect, just to name a few.  

Now we have the Zucman tax.

The title of his latest book says it all:  We Need to Tax Billionaires. When I read an advanced version of the French original, I groaned. I hoped the tract would disappear into a socialist corner in France. But Zucman is active on both sides of the Atlantic, and an English translation was released over the summer.

Gabriel Zucman is a Wunderkind. He was born in 1986. At age 27, he defended a doctoral dissertation on tax havens under the supervision of income inequality doomsayer Thomas Piketty, another socialist class warrior whose ideology has been known to drive his scholarship. After a stint at LSE, Zucman became an associate professor at UC Berkeley at the age of 33. A mere four years later, he became a full professor at France’s elite Ecole Normale Supérieure, with joint appointments at the Paris School of Economics, where he is the director of the European Tax Observatory; that is quite the pedigree.

Zucman has made a career—an obsession, perhaps—of focusing on income inequality, tax evasion, tax havens, and offshore wealth. In 2015, he published The Hidden Wealth of Nations, in which he lamented the effects of tax havens on national tax revenue and income inequality. In 2019, he co-authored The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay with Emmanuel Saez (a fellow Berkeley economist and the third in the Piketty-Saez-Zucman trio of high-tax crusaders).

Zucman has raised concerns amongst economists. His numbers are dodgy and often reflect his ideological bias. He routinely times his “scholarly” releases for impact in U.S. political campaigns, sharing his findings in slick press releases rather than in academic journals. In 2020, Harvard’s president and provost vetoed Zucman’s appointment to the economics faculty “partly over fears that Mr. Zucman’s research could not support the arguments he was making in the political arena.” This is from Harvard, where two-thirds of the faculty self-identify as left-wing.

Despite the cloud over his research, Zucman was named the Best Young Economist in France in 2018 by the Cercle des Economistes and the socialist daily Le Monde. In 2023, he won the coveted John Bates Clark prize, awarded every year to “that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge,” and generally considered to be a healthy predictor of a future Nobel prize. This is, if anything, a telling reflection on the mainstream of the economics profession.

The Latest Paean to the Wealth Tax

Zucman’s latest book was first released in French, in late October 2025, at the height of the Zucman tax debate in the French Parliament. One wonders if the U.S. release was timed for the midterm season. In terms of length, at 28 pages it is probably best referred to as an essay. In substance, it is more of a treatise in clichés and dime-store philosophy than an economics treatise, as it relies on hyperbole and sweeping claims about justice.

Zucman’s driving quest is a truly “progressive” tax system, where the tax burden increases, in absolute terms (amount) and relative terms (percentage paid), as income increases. This, he asserts, is an inherent democratic value: “equality before taxes.” Specifically, he is worried that “the ultra-rich” are not paying their fair share in taxes. The focus of this book is France, but his concern is the rich of the world. He plays with numbers, alternately describing France’s 100 billionaires, the top 75 households by net worth, and the 500 richest people in France, then ultimately settling on a tax targeting the top 1,800 households (by net worth). He frets that France’s tax system (like the U.S. system and that of many other countries) is indeed progressive, but only up to a point, then becomes regressive. In France, the bottom half of taxpayers pay an average tax rate of 45%; those in the 50% to 90% income tranche pay 50%; and the top 10% pay more than 50%. But the “ultra-rich” pay an effective tax rate of 25%. Or maybe it’s 13% (with 12% paid to foreign countries), or less than 2%, or (as the pamphlet’s title claims) “nothing.” It is not quite clear, as he shifts his assertions throughout. Regardless of the details, the richest pay less (in relative terms) than the average tax rate of 51%. This, he says, is because they are able to hide their income as corporate profits or capital gains.  

Zucman aims to stop this terrible injustice, this affront to democratic principles, with a wealth tax of 2% of net worth annually, regardless of sources of income, on the top 1,800 households. He claims to have chosen the figure of 2% annually to eliminate tax regressivity for the wealthiest households.

Zucman bases his claim on a number of loose assertions. He obviously hates income inequality, but never explains why (and never mentions poverty). He simply asserts that progressive taxation is a key feature of democracy. He cites Article 13 of the Declaration of the Rights of Man and of the Citizen of 1789, which asserts that “a general tax… must be equally distributed among all citizens, in proportion to their ability to pay”—from this, he derives progressive taxation. But he does not seem to understand the difference between percentages and totals. In the U.S., the top 50% of earners contribute 97% of income tax revenue. The top 10% pay 72%, the top 5% pay 61%, and the top 1% of earners pay 40% of tax revenue. Fully half of Americans and French citizens do not pay federal/national income taxes (yet have a say, through the ballot box, about federal expenditures). In France, the top 10% contribute 75% of tax revenue; the top 1% contribute 25% of total tax revenue. How is this equal distribution? I suspect an enterprising American lawyer could make a 14th Amendment case that progressive taxation violates the Equal Protection Clause.

There is no serious philosophy in this pamphlet. There is no discussion of distributive justice. There is really no discussion of economics, no concern for incentives, unintended consequences, distortions, or trade-offs. There is no mention of the Ramsey Rule of taxation (designing taxes to minimize economic distortions) or optimal tax theory. For all his laurels, Zucman seems woefully unaware of James M. Buchanan or the rich tradition of public finance. 

Many other things are missing. There is no discussion of institutions, economic freedom, or the inverse relationship between government spending and economic growth (although he does simply assert that government spending, especially on social programs and the welfare state, is the root of post-World War II economic growth). Zucman speaks of income “received,” rather than “created,” as if there were no link between productivity and income. There is no mention of cronyism, no mention that the problem might not be the “ultra-rich” but France’s government spending-to-GDP ratio of almost 60% (plus omnipresent regulation). Without explanation, he blithely dismisses the possibility that the wealthiest might shrug in the face of yet another tax or leave the country for a more favorable tax regime (his mentor Piketty solved this problem by proposing the arrest of tax emigrants at the airport). At best, a Zucman tax would increase tax revenue in France by .33% to 1.66% (but, in Zucman’s mind, it’s probably more about justice than revenue). So enamored is he of state capitalism that he simply dismisses the notion that raising taxes on the most productive citizens could have negative effects on entrepreneurship (never mind France’s current lack of competitiveness and innovation).

Instead, Zucman relies on an outlandish claim: billionaires and oligarchs (whether in France or the U.S.) became rich in large part through public services, from public education to public health, and from public infrastructure to public safety. Thus, they do not have a right to exile themselves after they get rich, nor is it fair for them to keep enriching themselves without contributing to the public treasury (never mind sales taxes and property taxes, investments, innovation, jobs created, or the ensuing payroll taxes). They thus have a responsibility to pay even more than the rest of us, in grateful recognition of all the state has provided to them. One is reminded of President Obama’s 2012 “you didn’t build that” comment. For a campy, funny, and effective dismissal of such nonsense, see Michael Munger’s parable.

Zucman’s tract is equal parts political polemic, dime-store philosophy, and socialist ideology. It does not contain much economics. Yet he continues to be influential as an economist, a scholar, and an apologist for ever-bigger government.