Analysis
Super-rich taxes would boost revenue and reduce inequality: They keep failing
Italian economists proposed a tax on financial income and other forms of wealth that are often subject to flat tax rates or benefit from loopholes that reduce their effective tax burden.
Rather than a “wealth tax” – an ambiguous term that can imply a one-off levy – what is being discussed nowadays is a tax reform for democracy. A proposal like the one advanced by the CGIL union to tax 1% of assets over €2 million is part of a broader policy aimed at using the resources from taxing the highest bracket of income from capital, and the income of multinationals, to finance a reduction in the tax burden on income from labour.
A study by economists Matteo Dalle Luche, Demetrio Guzzardi, Elisa Palagi, Andrea Roventini and Alessandro Santoro, published in La Voce.info on November 8, 2024, explained the proposal in the Italian context. The study demonstrates that Italy's tax system is not only unfair, but regressive, meaning it rewards higher incomes and is based on increasing taxes on the “middle class.” This same middle class is largely paying for a welfare state that is being privatized and stripped of services, and for an increasingly authoritarian state that lacks real democracy.
CGIL leader Maurizio Landini, among others, has proposed to target financial income and other forms of wealth that are often subject to flat tax rates or benefit from loopholes that reduce their effective tax burden. This mechanism leads to the wealthiest citizens contributing proportionally less than other taxpayers, especially when considering the cumulative impact of different taxes.
To correct this structural inequity and build a minimally fairer tax system, the economists propose shifting the tax burden toward higher taxation on wealth and capital income. This move would lead to a significant increase in state revenue and guarantee a reduction in economic inequality. In Italy, taxing the top 1% (approximately 500,000 Italians with at least €2 million in assets) would generate additional revenue of around €26 billion per year—a third more than the Meloni government's entire 2026 budget. Even focusing only on the 50,000 wealthiest individuals, with average assets over €15 million, would yield nearly €12 billion.
The manifesto “Taxing extreme wealth is fair and feasible,” signed by 134 economists from 50 Italian universities in support of Oxfam’s “Tax The Rich for Italy” campaign, also outlines a comprehensive tax reform that would go in a different direction from the one envisioned by the Meloni government. The proposal is to introduce additional income tax (IRPEF) brackets and marginal rates for higher incomes to alleviate the burden on the poorest taxpayers. These proposals aim to extend the personal income tax base to include income from financial capital, abolish substitute flat-tax regimes, and reform the land registry, which currently does not reflect the real market value of properties.
The “Zucman tax” (rejected in France), the “Tax the Rich” agenda, and the proposals from New York's new socialist mayor, Zohran Mamdani, are all moving in the same direction. The most common objection is the risk of “capital flight.” However, a study by the EU Tax Observatory, co-directed by French economist Gabriel Zucman, estimated that a modest 2% tax increase would only reduce the net return on large assets to around 5.5% from the current 7.5%. This impact is considered sustainable and would not trigger the feared capital flight. International coordination would, of course, be crucial to avoid opportunities for tax arbitrage.
What is missing is the political will to support such measures, which are, in essence, minimal and homeopathic in scale. Even worse, a reactionary offensive is underway from the far right and from authoritarian centrists who are defending the interests of capital. An uncertain and divided “left” lacks political strength and is easily intimidated by fiscal scaremongering about the “middle class” – the very same class that is passively enduring fiscal inequity and austerity in a war economy.
Originally published at https://ilmanifesto.it/zucman-e-gli-altri-super-ricchi-da-tassare-per-cambiare-sistema on 2025-11-08