Photo by Kelly Sikkema on Unsplash
MEPs say that in times of unprecedented polycrisis and existential threats to democracy, Europe must tackle public frustration over economic and social inequality through bold tax reforms.
That is the message from an event on Tuesday, organised by the Socialists and Democrats in the European Parliament.
MEPs say action coordinated wealth taxes and a minimum effective tax on capital gains can pave the way for greater tax justice.
On 4 February, the S&Ds collaborated with the Foundation for European Progressive Studies (FEPS) and the Kalevi Sorsa Foundation to host a seminar highlighting the urgent need to introduce wealth taxes and minimum capital income taxation.
The event, entitled “Capital and wealth taxation in the EU – Ways forward on the path of justice,” delved into an issue of growing concern both politically and economically.
S&D members Aurore Lalucq, Matthias Ecke, Jonás Fernández and Bruno Gonçalves participated.
Fernández, S&D spokesperson on economic and monetary affairs, said afterwards:“The situation is shocking.”
“In 22 EU member states, the richest 1% hold 32% of total net wealth, while the poorest half of all households own just about 4.5%. There has been a staggering $2 trillion rise in billionaire wealth in 2024, with a new billionaire emerging almost every week. These billionaires often use their power and resources not to contribute their fair share to the societies where they generate their wealth, but to shift the tax burden onto workers and the middle class.”
“This unfair situation must be addressed immediately to safeguard equal opportunities and restore trust in institutions. We have the support of the majority of Europeans to take action now. Over 70% believe the EU should do more to tackle income inequality. Europe can and must respond to this demand with bold tax reforms to ensure sufficient public revenue and a fairer redistribution of wealth.”
The forum heard that taxing the super-rich is also a matter of climate justice.
It was alleged that the world’s fifty richest billionaires, on average, generate more carbon emissions through their investments and assets in just over an hour and a half than the average person does in their entire lifetime.
The MEP added, “Allowing extreme wealth concentration at the top to persist would be a political, moral and economic failure. We have a duty to act in order to preserve not only social justice, but democracy itself and the independence of its institutions.”
Bruno Gonçalves, S&D spokesperson on taxation, noted, “In the face of extreme wealth disparity and growing risks to democracy, our tax systems must become fairer by reducing inequalities and ensuring that rules apply to all.”
“The S&Ds fully support the timely discussion initiated by Brazil’s G20 Presidency on introducing an effective tax on the wealth of worldwide billionaires, which could generate up to $250 billion per year. However, as the new US administration shifts away from multilateralism, already disavowing the 2022 global deal on minimum tax for multinationals, the EU cannot stand still.”
“We must take the lead and seek coordinated solutions among member states to tax extreme wealth.”
“There is also much to be done in the EU in the field of capital income taxation. Over the past decade, efforts have rightly focused on harmonisation and transparency to combat tax fraud and avoidance in corporate taxes. However, while capital is highly mobile, capital gains tax rates vary widely across the EU, with some member states imposing a 0% rate. Meanwhile, workers’ income remains the primary source of public revenue in the EU, accounting for 51.4% of GDP, whereas taxes on capital contribute only 8.5%.”
“This is why we call for a minimum effective taxation of capital gains, alongside strong anti-avoidance measures. The European Commission must take swift action to this end in order to ensure fairness is part of the announced efforts to further integrate capital markets. We need to rebalance the tax mix, easing the burden on workers and the middle class while ensuring that multinationals and the super-rich pay their fair share,” said the Euro member.
