Big wealth, small taxes


Illustration by Pete Reynolds ©

All European countries are facing similar challenges: the energy transition, the need to reinvest in the industry sector, elderly care, education, health, research and so on. All this in a rather sluggish economic environment, where growth, and therefore tax revenues, have been slowing down. Faced with this wave of necessary public spending, countries must choose between two solutions if they wish to keep public debt under control. They can cut back on other public spending, such as social welfare, as many are doing. Or they could increase tax revenues by taxing more – and better – that part of population which pays the lowest taxes relative to its wealth: the very rich.

How much are they currently paying? Which countries have the greatest economic inequalities? This investigation, coordinated by Alternatives Economiques, in which five other EDJNet newsrooms participated, seeks to answer these questions and determine how higher taxes on the super-rich would benefit the European economy.

Main findings:

  • ECB data show that between 2009 and 2023, the 50% least well-off Europeans held an average of just 4.8% of the Eurozone’s net wealth. The richest 5% held an average of 43.1% of the total. The situation varies from country to country, with even significant differences: in the Netherlands, for instance, the richest 5% hold 31.7% of net wealth, compared to 53.5% in Austria; Germany and Italy are among the most unequal countries. Riches saw their share of wealth rising with the economic crises of 2008 and 2020.
  • In recent years, almost every country in Europe has abolished its wealth tax, which existed in 12 countries just 30 years ago. The marginal tax brackets for higher incomes were lowered, as was the tax rate on profits.
  • Studies show that in European countries the wealthiest are taxed less than other taxpayers. In France, for example, the income tax rate is gradually falling from 46% for the richest 0.1 percent, to 26% for the top 0.0002%. This is because the wealth of these ultra-rich is largely made up of undistributed dividends, subject to corporate income tax, which has been falling for several years. Capital income is generally under-taxed relative to labour income by an average of 12% in OECD countries.


The data unit

Christian Chavagneux (Alternatives Economiques, coordinator) is a French economics journalist and Chairman of the Board of Directors of Alternatives Economiques. He wrote several essays, among which Les paradis fiscaux (“Tax havens”, with Ronen Palan, 2017) and Une brève histoire des crises financières (“A short story of the financial crises”, La Découverte, 2013).

Catherine André (Alternatives Economiques, coordinator) is Deputy Editor-in-Chief of Alternatives Economiques. A French graduate of Sciences-Po Paris and the London School of Economics, she has cofounded Voxeurop, speaks several languages and worked at Courrier international, Sciences et Vie Economie, and L’Expansion.

EDJNet members which took part in this investigation: