Opinion Today: How to get billionaires to pay a fair share

No one country could do it alone.

View in browser|nytimes.com May 7, 2024 By Gus Wezerek Graphics Editor, Opinion Before the pandemic, there was a table in the Times building piled high with books that publishers had sent to editors. When it became clear that Covid was going to keep the office closed for a while, I stuffed a bunch of them into my backpack — some homework for the quiet months ahead. One of the books, "The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay," certainly seemed like the sort of dry, technical reading I had to slog through in college. But I now count it as one of the most eye-opening books I've ever read. Written by the economists Gabriel Zucman and Emmanuel Saez, "The Triumph of Injustice" is filled with lucid charts showing how, over the past 50 or so years, inequality has skyrocketed while taxes on the wealthy have plummeted. I was so persuaded by the analysis that I reached out to Zucman soon after to collaborate on an essay. In it, we summarized one of the book's proposals: that countries should band together to prevent companies from dodging taxes by booking their profits in low-tax countries. (Later that year, many nations did just that.) In a guest essay published on Friday, Zucman and I teamed up again. This time, our focus is on individual billionaires, who are just as clever as large companies when it comes to exploiting tax loopholes. The degree to which the superrich have minimized their tax burden is shocking. In the 1960s, the 400 richest Americans paid about half their income in taxes. By 2018, their effective tax rate had dropped to 23 percent, which is lower than the rate that working-class Americans paid. Zucman's solution is similar to his fix for multinational tax dodging: a global minimum tax. The idea is straightforward. Countries would agree that no matter where a billionaire lives, he should pay some small portion of his net worth — say, 2 percent — in taxes each year. If the billionaire already paid that much in income tax, he wouldn't owe anything more. But if he has moved to a country with a lower tax rate or found a hole in his nation's tax code, then the billionaire's home country could charge him the difference between the taxes he paid and the minimum rate. There are details in the proposal for the world's finance ministers to iron out, of course. And we won't erase inequality just by asking billionaires to give a bit more money back to the countries that fund their employees' education and health care. But, as Zucman writes, "It is a necessary first step." Read the feature here: The New York Times It's Time to Tax the Billionaires Billionaires are experts at avoiding taxes. By banding together, countries can make them pay up. By Gabriel Zucman ADVERTISEMENT Here's what we're focusing on today: Editors' Picks When I Look at You, Will You Look at Me? 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