As budgets strain and fortunes balloon, governments from Paris to Bogotá test how far they can go in taxing wealth—and how fast the super-rich can move.

Paris/Madrid/Bogotá— Wealth taxes are back at the center of politics in advanced economies. In a year when deficits are widening and public services—from trains to oncology wards—are pleading for money, the idea that assets, not just paychecks and purchases, should shoulder more of the load has regained momentum. But even as the proposals multiply, the practical question that has dogged them for decades remains: how do you tax wealth in a world where billionaires and their balance sheets are highly mobile?

The debate is most vivid in Europe. In France, a fresh push for a targeted levy on ultra‑rich households has vaulted from academic paper to political bargaining chip, galvanizing support on the left and ire on the right. Supporters argue that an annual assessment on fortunes well above €100 million would raise meaningful revenue without touching ordinary savers. Skeptics brand it a recipe for capital flight and slower growth, recalling France’s old wealth tax—which was narrowed in 2018 to cover only real estate—as a cautionary tale. The new blueprint, though, leans on modern tools that didn’t exist a decade ago: automatic information exchange between tax authorities, stronger disclosure rules for trusts and shell companies, and a clearer global picture of who owns what.

Beyond France, several EU capitals are weighing adjacent ideas. Spain, which already runs a regional wealth tax, has paired it with a temporary solidarity surcharge on the largest fortunes. Italy and Germany remain reluctant, but both face the same budget arithmetic: expensive aging populations, defense rearmament and green-transition bills that are hard to fund through labor and consumption taxes alone. At the EU level, finance ministers are debating how to align national rules so that high‑net‑worth individuals cannot exploit mismatches in valuation, exemptions or residency.

Outside Europe, wealth taxation never fully disappeared. Colombia reinstated a modern, progressive net‑wealth tax that applies to top-tier balance sheets, while several Latin American countries experimented with one‑off levies during the pandemic. Their experience is a reminder that administrations can, with sufficient political will, design and collect taxes on stocks of assets—but also that the devil is in the details: what counts as wealth, how it’s valued, and how to treat illiquid founders’ stakes.

Why fiscal systems struggle to see wealth

Income and consumption are easy to meter; wealth is not. Traditional tax systems were built to track salaries, dividends and sales receipts. They struggle with modern portfolios that sprawl across jurisdictions and legal wrappers. Much of today’s billionaire wealth sits in closely held companies, private funds and cross‑border trusts. Valuing those positions annually is costly and contentious. The administrative challenge is compounded by asset volatility: what looks like a taxable surge one year can evaporate the next.

Two approaches dominate the current conversation. The first is a classic net‑wealth tax: an annual percentage applied to a household’s net assets above a high threshold, excluding ordinary homes and retirement accounts. The second is a minimum tax on unrealized gains or on measured wealth for only the very top—for example, a 1–2% floor that ensures that billionaires who realize little income still pay something each year. Either model can be paired with an ‘exit tax’ that claws back liabilities if a taxpayer changes residency to avoid the levy. The more targeted the design, the narrower the base—and the more pressure on accurate measurement and enforcement.

Mobility, myth and reality

The specter of the private jet has long loomed over wealth‑tax debates: raise the rate and the rich will take off. Empirical research offers a more mixed picture. Some millionaires do relocate when top tax rates rise. But many do not—because moving disrupts families and businesses, and because a critical mass of jurisdictions now exchange financial account data. The nascent architecture of global transparency has raised the cost of hiding assets and lowered the payoff from shopping for zero‑tax havens. Still, mobility matters at the extreme top end: a handful of billionaires can restructure holdings overnight, and countries compete to attract them with special regimes and investor visas.

That is why enforcement capacity is as important as statutory design. Tax authorities need engineers and forensic accountants who can match beneficial owners to assets, interrogate valuation models, and audit sophisticated derivatives. They also need stable funding. Many agencies still run on creaking IT and short‑term staffing, which invites arbitrage. Reversing that under‑investment is a precondition to any serious wealth‑tax experiment.

Design choices that make or break a wealth tax

Four features separate credible plans from symbolic ones:
• A high threshold and narrow target. Start where the administrative juice is worth the squeeze—households whose wealth is measurable and concentrated in financial assets. Exempt primary residences up to a generous cap and standard retirement savings.
• Clear valuation rules. Use tiered methods: market prices for listed assets; last funding round with discounts for illiquid private equity; safe‑harbor formulas for hard‑to‑price stakes; and deferred payment or ‘carry‑forward’ options when cash is tight.
• Robust anti‑avoidance. Combine controlled‑foreign‑company rules, look‑through provisions for trusts and partnerships, and exit taxes triggered by emigration. Back them with data from automatic exchange agreements.
• Earmarked transparency. Tie a portion of proceeds to visible public goods—school modernizations, hospital staffing, climate upgrades—and publish a line‑by‑line account so taxpayers can see where the money goes.

The politics of fairness

Support for taxing extreme wealth has grown as median households feel squeezed by prices and by fragile public services. For many voters, the question is less technical than moral: should someone who can borrow against a growing paper fortune pay less tax than a nurse or a teacher? Wealth taxes, or billionaire minimums, answer that with a visible number. Business leaders retort that such levies punish ambition and risk driving away innovative founders. Policymakers caught between those poles have floated compromises: time‑limited surcharges; carve‑outs for active founders; credits for verified philanthropic giving; and conversion options where taxpayers can satisfy liabilities by transferring a small slice of public‑company shares to a state trust.

Global coordination, or a coalition of the willing

The biggest shift since the last wave of wealth‑tax debates is geopolitical. After the 2021 global deal on minimum corporate taxes, the idea of a coordinated floor on billionaire taxation has migrated from op‑ed pages to policy memos. A 2% global minimum on the world’s richest, collected where individuals reside but creditable across borders, is one blueprint now being actively discussed. Nobody expects a universal treaty overnight. But there is precedent for ‘critical mass’ strategies: a club of countries moves first, aligns definitions, shares data, and pressures holdouts by denying them financial market access unless they cooperate.

What success would look like

Even an impeccably designed wealth tax will not, on its own, rebuild fiscal states or erase inequality. The ceiling of sustainable rates is lower than advocates sometimes admit, and revenue is lumpy. Success should be measured in sturdier budgets at the margin; in a signal that extreme wealth does not equate to an ultra‑low effective tax rate; and in better information about ownership. If the administrative costs are kept modest relative to proceeds, and if evasion is contained by international cooperation, a carefully targeted levy could become a permanent, if small, pillar of modern tax systems.

The harder test is political durability. Taxes that exist only on paper, or for a single electoral cycle, encourage sophisticated taxpayers to wait them out. To endure, wealth taxes must be paired with credible enforcement investments, predictable rules for illiquid assets, and accountability for how funds are spent. Those are not headline‑grabbing tweaks. But they determine whether ‘taxing wealth’ is a symbolic slogan—or a workable answer to the defining distributional politics of our time.