Billionaires scorned over proposed wealth taxes

From Britain and Denmark to blue state America, calls for new levies on the top 0.01 per cent of society are growing louder. In simple terms, it seems like a clear solution for cash-strapped governments and voters drowning under never-ending price hikes. But major backlash is brewing.

The gilded class meanwhile, keeps getting richer. The world’s wealthiest 500 people raked in another US$2.2 trillion just last year, ballooning their collective net worth to nearly US$12 trillion. They are also finding ever more ways to shape public policy and influence the media in their interests.

But political organizers are now drawing global attention by trying to advance a ballot initiative in California to have voters decide in November whether to apply a one-time, five per cent tax on the state’s wealthiest residents. The goal is to raise US$100 billion to compensate for the Trump administration’s deep cuts to Medicaid.

Progressive Senator Bernie Sanders and Democratic congressman Ro Khanna — who represents Silicon Valley — are aiming even higher. They’ve proposed federal legislation to enact a five per cent annual wealth tax on all U.S. billionaires. The two lawmakers claim it would raise US$4.4 trillion over a decade to be redistributed to working and middle-class families.

The California initiative might just become reality. Although, the state’s ultra-rich and pro-corporate lobbyists are keen to shoot it down.

Google co-founders Sergei Brin and Larry Page have reportedly moved their homes to Miami along with numerous business assets. David Sacks, a prominent venture capitalist who doubles as the Trump administration’s AI and cryptocurrency czar, has also relocated. Libertarian serial tech investor Peter Thiel has donated US$3 million to lobby groups fighting the proposal.

Even Gov. Gavin Newsom is trying to distance himself from it. The rising Democratic star fears immense capital flight will shrink the tax base and straitjacket government spending. “The fact is it actually will reduce investments in education,” Newsom has warned. “It will reduce investments in teachers and librarians, childcare. It will reduce investments in firefighting and police.”

By some counts, the threat of the tax alone has already convinced individuals worth a combined US$1 trillion to flee to low-tax jurisdictions like Texas and Florida.

Indeed, past experiments in wealth taxes have produced mixed results — at best. “Trying to fill budgetary gaps by soaking the rich will not work,” cautioned The Economist in February. “It will raise less money than expected, damage economies and cause long-term political harm.”

That may all be true. But liberal democracies everywhere are noticeably failing to find any solutions — even symbolic ones — to tame populist rage over widening chasms of inequality. This also has obvious destabilizing effects.

It doesn’t help that billionaires are running roughshod over institutions or indulging in vanity projects like space tourism when most citizens are struggling and the planet burns. A 2024 study from Oxfam International found that billionaires’ lifestyles emit more carbon emissions in 90 minutes than the average person does in a lifetime.

“The super-rich are treating our planet like their personal playground, setting it ablaze for pleasure and profit. Their dirty investments and luxury toys — private jets and yachts — aren’t just symbols of excess; they’re a direct threat to people and the planet,” said Oxfam International Executive Director Amitabh Behar at the time.

This was most stark during the heights of the pandemic in 2020. As the world shut down and governments mortgaged their citizens’ futures to keep economies afloat, 131 billionaires globally doubled their wealth. This as nearly 97 million people were newly thrown into extreme poverty.

In May 2024, the Government of Canada’s future planning centre released a report assessing 35 society-altering disruptions that could occur within the next decade. Topping the list, in the next three to five years, is computer-generated deepfakes destroying people’s ability to tell fact from fiction. Following that — in terms of both severity of impact and highest likelihood — were people unable to afford to live on their own, an epidemic of mental health problems and billionaires running the world.

It seems all of those corrosive dynamics are already here.

“The scarce resources we have should be used to prioritize the basic needs of people in poverty and to create what is of societal value rather than serve the frivolous desires of the ultra-rich,” Olivier De Schutter, the UN special rapporteur on extreme poverty and human rights told The Guardian in an interview earlier this month.

It’s a wonderful vision. But California’s example signals the world’s most privileged people will instinctively do whatever they can to derail it.

Kyle Volpi Hiebert is a Montreal-based political risk analyst focused on globalization, conflict and emerging technologies.