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AN INEQUALITY TALE OF TWO CAPITAL CITIES  
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Sam Pizzigati
March 9, 2025
Inequality.org
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_ In one, lawmakers are taxing the rich. In the other, they're
rushing the rich a free pass at tax time. _

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Nine of the world’s ten wealthiest
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United States home. The remaining one? He lives in France. And that
one — Bernard Arnault, the 76-year-old who owns
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about half the world’s largest maker of luxury goods — is now
feeling some heat.

What has Arnault and his fellow French deep pockets beginning to
sweat? Lawmakers in France’s National Assembly have just given a
green light to the world’s first significant tax on billionaire
wealth.

“The tax impunity of billionaires,” the measure’s prime sponsor,
the Ecologist Party’s Eva Sas, exulted
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month, “is over.”

Sas had good reason for exulting. In the French National Assembly
debate over whether to start levying a 2 percent annual tax on wealth
over 100 million euros — the equivalent of $108 million — the
leader of the chamber’s hands-off-our-rich lawmakers introduced 26
amendments designed to undercut this landmark tax-the-rich initiative.
All 26 of these amendments failed.

But France’s 4,000 or so deep pockets worth over 100 million euros
— the nation’s richest 0.01 percent — don’t have to open up
their checkbooks just quite yet. The French Senate’s
right-wing-majority has no intention of backing the National
Assembly’s new levy, and, even if the Senate did, France’s highest
court would most likely dismiss the measure.

French president Emmanuel Macron, for his part, has spent most of the
last decade cutting corporate tax rates and axing taxes on investment
assets. And his budget minister has blasted
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month’s National Assembly tax-the-rich move as both “confiscatory
and ineffective.”

None of this opposition, believes the French economist who inspired
the National Assembly’s new tax move, should give us cause to doubt
that move’s significance. The annual tax on grand fortune that the
Assembly’s lawmakers have passed, says the UC-Berkeley analyst
Gabriel Zucman, represents
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progress” that has the potential to set a bold new global precedent.

What makes the National Assembly’s tax legislation even more
significant? That tax-the-rich vote has come at a time when the most
powerful nation on Earth — the United States — is moving in the
exact opposite direction. The new Trump administration, with the help
of the world’s single richest individual, is now busily hollowing
out the tax-the-rich capacity of the Internal Revenue Service.

Donald Trump’s predecessor, Joe Biden, had actually made some
serious moves to enhance that IRS capacity, hiring — before he left
office — thousands of new tax staffers. But those new hires, notes
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have now started going through Elon Musk’s “DOGE” meat-grinder.

Team Trump’s ultimate goal at the tax agency? To use layoffs,
attrition, and buyouts to cut the overall IRS workforce “by as much
as half,” the Associated Press reports
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A reduction in force that severe, charges former IRS commissioner John
Koskinen, would render the IRS “dysfunctional.”

The prime target of the ongoing IRS cutbacks: the agency’s Large
Business and International office, the IRS division that specializes
in auditing America’s highest-income individuals and the companies
they run.

On average, researchers have concluded
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recent years, every dollar the IRS spends auditing America’s richest
ends up returning as much as $12 in new tax revenue. The current
gutting of the agency’s most skilled staffers, tax analysts have
told _ProPublica_, “will mean corporations and wealthy individuals
face far less scrutiny when they file their tax returns, leading to
more risk-taking and less money flowing into the U.S. treasury.”

Moves to “hamstring the IRS,” sums up former IRS commissioner
Koskinen, amount to “just a tax cut for tax cheats.”

Donald Trump, agrees
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Institute on Taxation and Economic Policy’s Amy Hanauer, “is
waging economic war on the vast majority of Americans, pushing to
further slash taxes on the wealthiest and corporations, while sapping
the public services that keep our communities strong.”

Public services like Social Security. Elon Musk has lately taken
to deriding
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most beloved federal program as a “Ponzi scheme,” and the Social
Security Administration’s new leadership team, suitably inspired,
has just announced
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trim some 7,000 jobs from an agency “already at a 50-year staffing
low.”

A vicious economic squeeze on America’s seniors. A massive tax-time
giveaway for America’s richest. How can we start reversing those
sorts of inequality-inducing dynamics? The veteran retirement analyst
Teresa Ghilarducci has one fascinating suggestion.

Any individual’s annual earnings over $176,100 will this year,
Ghilarducci points out
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face not a dime of Social Security tax. A CEO making millions of
dollars a year will pay no more in Social Security tax than a civil
engineer making a mere $176,100.

If lawmakers removed that arbitrary $176,100 Social Security tax cap
and subjected more categories of income — like capital gains — to
Social Security tax, Ghilarducci reflects, we could ensure Social
Security’s viability for decades to come and even make giant strides
to totally ending poverty among all Social Security recipients.

And if we had just merely eliminated the Social Security tax cap on
annual earnings in 2023, the most recent stats show, America’s 229
top earners would have paid more into Social Security that year than
the 77 percent of American workers who took home under $57,000.

We could also apply Ghilarducci’s zesty tax-the-rich spirit to the
broader global economy, as the inspiration behind France’s recent
tax-the-rich moves, the economist Gabriel Zucman, has just observed
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a piece that cleverly suggests “tariffs for oligarchs.’

The fortunes of our super rich, Zucman reminds us, “depend on access
to global markets,” a reality that could leave these rich vulnerable
at tax time. Nations subject to Trump’s new tariffs, he goes on to
explain, could retaliate by taking an imaginative approach to taxing
Corporate America’s super rich.

“In other words,” Zucman notes, “if Tesla wants to sell cars in
Canada and Mexico, Elon Musk — Tesla’s primary shareholder —
should be required to pay taxes in those jurisdictions.”

Taking that approach “could trigger a virtuous cycle.” The super
rich would soon find relocating either their firms or their fortunes
to low-tax jurisdictions a pointless endeavor. Any savings they might
reap from such moves would get offset by the higher taxes they would
owe in nations with major markets.

The current economic “race to the bottom,” Zucman quips, could
essentially become “a race to the top” that “neutralizes tax
competition, fights inequality, and protects our planet.”

Lawmakers in France have just shown they’re willing to start racing
in that top-oriented direction. May their inspiration spread.

_SAM PIZZIGATI, AN INSTITUTE FOR POLICY STUDIES ASSOCIATE FELLOW,
CO-EDITS INEQUALITY.ORG. HIS LATEST BOOKS INCLUDE The Case for a
Maximum Wage
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Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that
Created the American Middle Class, 1900-1970
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FOLLOW HIM ON Bluesky [[link removed]]._

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