Countries That Tax the Wealthy and Large Fortunes

Some countries are considering increasing taxes on the wealthy to fund social programs and reduce economic inequalities. This initiative aims to impose higher taxes on large fortunes while combating tax evasion and income disparities. Here’s an overview of the countries that have implemented such policies.

More and more countries around the world are establishing fiscal policies aimed at taxing the wealthy and large fortunes to reduce economic inequalities, fund public spending, and encourage a fairer distribution of wealth. These taxes take various forms, whether income taxes, wealth taxes, or inheritance taxes.

France: Real Estate Wealth Tax (IFI)

France has long been known for its wealth tax, called the Solidarity Wealth Tax (ISF), which taxed assets above a certain threshold. However, in 2018, this tax was replaced by the Real Estate Wealth Tax (IFI), which now only applies to real estate assets. Financial assets have been excluded from the calculation. The IFI rate ranges from 0.5% to 1.5% for real estate assets exceeding 1.3 million euros. This tax aims to reduce the accumulation of real estate wealth and fund social programs.

Norway: A Tradition of Taxing Large Fortunes

Norway applies a personal wealth tax starting from a relatively low threshold, around 1.7 million Norwegian kroner (approximately 150,000 euros). This tax is progressive, reaching about 1% for the largest fortunes. The country justifies this taxation by its commitment to economic equality and wealth redistribution. It is an integral part of the Scandinavian welfare state model.

Spain: Wealth Taxes and Additional Measures

Spain also imposes a wealth tax, called Impuesto sobre el Patrimonio, with rates varying by region. The tax generally starts for assets exceeding 700,000 euros, with progressive rates that can reach up to 3.5% in some autonomous communities, such as Catalonia. In 2022, the Spanish government introduced an additional temporary tax for fortunes exceeding 3 million euros, in response to the pandemic and rising public spending.

Switzerland: Cantonal Wealth Taxes

Switzerland is often perceived as a tax haven, but it actually imposes a wealth tax at the cantonal level. This tax applies to total assets (real estate, financial, etc.), with rates varying from 0.1% to 1% depending on the canton. The cantons of Geneva and Vaud are among the strictest regarding wealth taxation. Switzerland justifies these taxes as a way to balance wealth accumulation and fund its high-quality public services.

Argentina: The Wealth Tax

In 2020, Argentina introduced an exceptional tax called Impuesto a la Riqueza, designed to fund pandemic-related expenses. This tax targeted individuals holding assets worth more than 200 million pesos (around 2 million euros), with rates reaching up to 5.25%. Although this tax was temporary, it sparked a debate on implementing permanent wealth taxes.

The United States: Debates on Taxing the Ultra-Rich

In the United States, there is no federal wealth tax, but several proposals to tax the ultra-rich have emerged in recent years. Political figures like Elizabeth Warren and Bernie Sanders have proposed wealth taxes on households holding more than 50 million dollars. These proposals aim to reduce the growing inequalities in the United States, where the gap between rich and poor has significantly widened. However, these initiatives face strong political opposition and have not yet been adopted.

Conclusion

Taxing large fortunes is a topic of debate in many countries, with some seeing these measures as an effective way to reduce inequalities, while others criticize their potential impact on investment and economic growth. While some countries, such as France or Norway, have a long tradition of taxing the wealthy, others, like Argentina or Spain, have recently introduced taxes in response to economic or social crises. Despite resistance, these measures are becoming an increasingly used tool to bridge public deficits and promote greater social justice.