A global wealth tax is not such a crazy idea
The haters say it would be too difficult to shut down international tax havens. But the tax haven business has seen better days.


Thomas Piketty's Capital in the Twenty-First Century has been praised to the skies for its historical analysis of income inequality. But one aspect of Capital that many people have dismissed is his solution to the problem: A global wealth tax. It would be too politically difficult, the logistics are impossible, and you'll never crack down on international tax havens, the critics say.
One writer who hasn't given up on the idea is Clive Crook, who writes that implementing the tax will be easier than people think. I give Crook a lot of grief, but here I think he's on to something, noting that an ongoing U.S. war against tax havens has been experiencing some success:
Plutocrats are mobile and can live and work where they please. They can hire teams of lawyers to advise them on domicile, residence, citizenship, and any of a thousand factors that will affect their tax liabilities. Cooperation among tax authorities in closing loopholes is therefore necessary. But it's happening, and is likely to go further. [Bloomberg View]
This is all partly true! Starting a tax shelter shell company is now a huge pain in the neck, and a vigorous crackdown on tax cheats should at least be possible.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
But Crook misses a piece of strong evidence in his favor: Being a tax haven isn't all that great for small countries. The financial crisis and its aftermath have taught nations like Cyprus, Ireland, and Iceland the danger of having too much foreign capital. Indeed, the tax havens themselves might be amenable to a global wealth tax.
Ireland tried the tax shelter gambit as a general development strategy, and it backfired spectacularly. It turns out that a vast flow of hot money into a small country doesn't create sustainable long-term investment. Instead, it creates bubbles, which tend to crash the economy when they pop.
Then there's Cyprus, whose crazy bank speculation was fueled with Russian cash of dubious provenance.
Of course, Ireland and Cyprus are both on the euro, which caused unique complications. But even Iceland, with its sovereign currency, is still suffering the effects of a massive banking collapse in 2008 caused by a run by foreign depositors.
This is not to downplay the incredibly steep political hill that any global wealth tax would have to climb. And there will likely always be a few small places (e.g., Bermuda) whose governments are corrupt enough to be bought off, allowing wealthy tax cheats to hide their billions.
But a big lesson of the 2008 crisis is that unrestricted capital flows are hugely destructive to everyone involved. International coordination to restrict capital movement is already happening in certain places. A similar effort to tax wealth wouldn't be all that different.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Ryan Cooper is a national correspondent at TheWeek.com. His work has appeared in the Washington Monthly, The New Republic, and the Washington Post.
-
Scottish hospitality shines at these 7 hotels
The Week Recommends Sleep well at these lovely inns across Scotland
By Catherine Garcia, The Week US Published
-
Scientists invent a solid carbon-negative building material
Under the radar Building CO2 into the buildings
By Devika Rao, The Week US Published
-
Crossword: April 1, 2025
The Week's daily crossword
By The Week Staff Published
-
The JFK files: the truth at last?
In The Spotlight More than 64,000 previously classified documents relating the 1963 assassination of John F. Kennedy have been released by the Trump administration
By The Week Staff Published
-
'Seriously, not literally': how should the world take Donald Trump?
Today's big question White House rhetoric and reality look likely to become increasingly blurred
By Sorcha Bradley, The Week UK Published
-
Will Trump's 'madman' strategy pay off?
Today's Big Question Incoming US president likes to seem unpredictable but, this time round, world leaders could be wise to his playbook
By Sorcha Bradley, The Week UK Published
-
Democrats vs. Republicans: who are the billionaires backing?
The Explainer Younger tech titans join 'boys' club throwing money and support' behind President Trump, while older plutocrats quietly rebuke new administration
By Harriet Marsden, The Week UK Published
-
US election: where things stand with one week to go
The Explainer Harris' lead in the polls has been narrowing in Trump's favour, but her campaign remains 'cautiously optimistic'
By Harriet Marsden, The Week UK Published
-
Is Trump okay?
Today's Big Question Former president's mental fitness and alleged cognitive decline firmly back in the spotlight after 'bizarre' town hall event
By Harriet Marsden, The Week UK Published
-
The life and times of Kamala Harris
The Explainer The vice-president is narrowly leading the race to become the next US president. How did she get to where she is now?
By The Week UK Published
-
Will 'weirdly civil' VP debate move dial in US election?
Today's Big Question 'Diametrically opposed' candidates showed 'a lot of commonality' on some issues, but offered competing visions for America's future and democracy
By Harriet Marsden, The Week UK Published