Why Britain’s next prime minister must tax billionaire wealth now. Democracy is on the line

The financial world has reacted with euphoric celebration to SpaceX’s recent stock listing. Yet, as market onlookers cheer Elon Musk’s personal fortune crossing the historic $1 trillion threshold, we are forced to confront an uncomfortable, vital truth: the emergence of trillionaires is not an economic triumph, but a structural crisis and the defining political challenge of our era.

There is a fundamental tension between extreme wealth and democracy. Beyond a certain point, capital ceases to be money and becomes power: the power to shape markets, dominate public debate, influence governments, finance elections, and weaken democratic institutions. No democratic society can remain healthy while allowing such vast concentrations of private power.

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The speed of wealth concentration is staggering. Since the 2008 financial crisis, billionaire fortunes have grown at an unprecedented pace, accelerated by monetary policies that inflated asset prices. Between March 2024 and March 2026 alone, global billionaire wealth increased by around 40%. When Forbes first tracked billionaires in 1987, 140 billionaires collectively held wealth equal to about 3% of world GDP. Today, roughly 3,000 families control assets worth around 17% of global GDP.

After the Second World War, it briefly appeared that such concentrations of wealth had become relics of history. Thanks to the institutionalisation of progressive income and estate taxes – which pushed top marginal rates near 100% in both the United States and the United Kingdom – the oligarchical fortunes of the past had largely dissolved. But it’s now coming back in full force.

The United Kingdom illustrates this transformation. In 1989, the inaugural year of the Sunday Times Rich List, the top 0.001% of wealthiest British households – a mere 200 families – held wealth equivalent to 5% of UK GDP. Today, that identical sliver of the population commands an astonishing 25% of GDP. It means that if they spent all their wealth, these 200 families could buy the equivalent of a fifth of all the goods and services produced in the UK in a given year. It is a deeply alarming paradigm, particularly when juxtaposed against data from the World Inequality Lab showing that the least affluent half of the British population splits a microscopic 4% of national wealth.

Some argue that billionaire wealth is merely ‘paper wealth’. This is a dangerous delusion: extreme wealth is, in fact, always very real. Consider our first trillionaire. Elon Musk’s automotive venture, Tesla, did not record a profit for nearly two decades after its 2003 founding. Yet, this paper-heavy valuation did not prevent him from leveraging his wealth to purchase Twitter for $44 billion, weaponising the network to advance specific political agendas, and effectively engineering a presidential election outcome. This same unchecked leverage allows Larry Ellison to buy up major television networks and social media platforms, just as it allowed billionaire donors to orchestrate 20% of all political funding in the 2024 US election cycle.

Read more:

• Billionaires are making a killing during cost of living crisis – we can’t afford to accept this
• World’s billionaires are worth £11.3 trillion. Here’s how their cash could make the world a better place
• Could a wealth tax convince young people to vote Labour?

Whether exercised by Musk or anyone else is ultimately beside the point. Democracy should never depend on the judgment of a single individual worth a trillion dollars. The solution begins by addressing a remarkable fiscal anomaly: the world’s richest people often pay lower effective tax rates than ordinary workers. Ultra-wealthy individuals typically hold their assets through personal holding companies that accumulate dividends and unrealised capital gains while reporting little taxable income. They can finance lavish lifestyles by borrowing against appreciating assets rather than selling them. As a result, some billionaires legally report so little taxable income that they qualify for public benefits while their fortunes continue to grow.

The most effective response is a minimum tax based directly on wealth rather than reported income. In a proposal presented to the G20 in 2024, I argued for a global minimum tax of 2% on net wealth above $100 million. This would function as a fiscal floor: individuals already paying at least that amount through existing taxes would owe nothing further, while those paying less would make up the difference. The 2% rate was not chosen at random: it is the rate that would ensure that the ultra-rich contribute at least as much to public finances as other social groups, such as teachers or nurses. A recent study by the International Tax Observatory, where I serve as director, shows that it would generate more than $250 billion per year – funds that could help finance infrastructure, education, healthcare, or tax relief for low-income households.

To ensure this framework works in practice, where past wealth taxes failed, we must design the law around two non-negotiable pillars. First, there must be no exemptions. Previous wealth taxes often failed because lawmakers carved out broad exclusions, especially for business assets. Since billionaire fortunes consist largely of corporate shares, these loopholes rendered many wealth taxes ineffective. A modern minimum tax must apply to all forms of wealth above the threshold.

Second, the legislation should include an ironclad tax exile shield. Critics argue that billionaires would relocate to low-tax jurisdictions. But tax competition is a political choice, not a law of nature. Any country can unilaterally dictate that if an individual spends their life and becomes ultra-rich within its borders, the state will continue to collect the minimum wealth tax for 5, 10, or 15 years after their departure. International information-sharing agreements already allow tax authorities to monitor overseas assets and enforce compliance through domestic property or corporate holdings.

The fiscal benefits would also be substantial. In the UK alone, applying a 2% minimum tax to fortunes above £100 million would raise around £15 billion annually – roughly 10 times the savings expected from Keir Starmer’s catastrophic 2024 decision to scrap the winter fuel allowance for retirees.

The Labour government faces a clear and urgent choice. If it continues to ask ordinary citizens to bear the brunt of public finance adjustments while allowing extreme wealth to go untaxed, it will deepen public disillusionment and fuel the rise of the extreme right. When families are forced to make impossible choices while the ultra-wealthy thrive, turning to radical political alternatives is a symptom of a deeper pain. This political drift thrives when the social contract is broken, and nothing breaks it faster than a tax system that is more lenient on billionaires than on ordinary people.

The next prime minister has no choice: to protect British democracy and address the deep sense of betrayal fuelling this extremist wave, the new administration must act. Britain has often been ahead of the curve, from pioneering progressive income taxation in the early 20th century to helping build the modern welfare state after 1945. By confronting the concentration of wealth and power with a 2% minimum tax, Britain can once again lead the world. The age of trillionaires is not inevitable: it is a political choice, and the time to choose a different path is now.

Gabriel Zucman is professor of economics at the Paris School of Economics, Summer Research Professor at the University of California, Berkeley, and founding director of the International Tax Observatory. He is the author of We Need to Tax Billionaires, out now (Basic Books, £9.99). You can buy it from the Big Issue shop on bookshop.org, which helps to support Big Issue and independent bookshops.

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