The fear that the over-concentration of wealth poses a threat to social cohesion is not new. From Solon to Aristotle, the writers of antiquity remind us that extreme inequalities give rise to attitudes and undermine democracy.
In today’s Europe of an aging population, rising inequalities, increased defense spending and the green transition, the issue is resurfacing: How can we finance a resilient welfare state without overburdening labor and entrepreneurship?
I shall be looking back here to my experience of the tax on financial transactions based on the Tobin tax.
As a commissioner, I had consistently and persistently advocated for the Belgian government’s proposal during the French presidency for a minimum levy on international capital flows aimed at curbing speculation and financing global public goods. But while it has only been partially implemented by some countries, it remains relevant as a philosophy.
The answer points to a progressive, coordinated taxation of great wealth—a tax reform that recognizes the contribution made by those who have succeeded through work, intelligence and risk, but calls for them to contribute their fair share toward maintaining social balance and democratic stability.
The European Union and Greece face three parallel challenges:
- Fiscal sustainability, as public debts increase and the need for investment in technology, research and defense grows.
- Inequalities, as the richest 1% of Europeans now own more than 30% of the continent’s net wealth.
- Public goods, such as climate and health, education and social protection, which require stable and common funding.
In this environment, the discussion on a contribution by the wealthy is more than an ideological choice; it is a governance necessity. Zucman’s proposals for a 2% annual tax on assets above €100 million are not a political stunt. They are underpinned by powerful arguments. It is no coincidence that leading Nobel Prize-winning economists have argued in favor of taxing great wealth.
Paul Krugman (2008) argues that the super-rich contributing their fair share is a condition for the survival of democracy. Angus Deaton (2015) talks about a redistribution of wealth that restores the legitimacy of the system. Abhijit Banerjee and Esther Duflo (2019) argue that the rich can contribute without development suffering, while Jean Tirole (2014) calls for common European standards of transparency. Thomas Piketty, although not a Nobel laureate, provided the theoretical basis for this debate with his work Capital in the 21st Century: without a progressive tax on wealth, there is a risk of capitalism turning into feudalism, where inherited wealth prevails over effort and creativity.
There are also arguments against, such as those made by Aghion (2025), who raises the issue of incentives and disincentives for innovation. But it should not go unnoted that international organizations such as the OECD and the IMF have put fairer taxation and taxing wealth on their agendas.
In Greece, N. Christodoulakis recently presented evidence that a very small tax on very great wealth could have a social impact, while M. Salas has discussed the introduction of a flat tax of 0.6%-0.7% on net wealth excluding first homes, deducting loans, and with a non-taxable threshold of one million Euros. Of course, without coordination across the whole bloc, the risk of “tax tourism” remains real. though not excessive. It requires a minimum set of commonly accepted rates and information exchange mechanisms to make tax avoidance unprofitable.
In 2022, with the report of the High-Level Group on the “Future of Social Protection and the Welfare State in the EU”, which I had the honor to chair, we proposed three key recommendations on the financing of the welfare state.
Broadening the tax base and shifting the burden from labor to capital and wealth. The European Commission should coordinate Member States’ efforts to implement a common policy on capital taxation and to combat tax evasion and avoidance.
A European agreement on minimum rates to end tax competition between member states.
Implementing the “golden rule” on social investment, so that state borrowing is exempted from the budget deficit when it is used to finance education, health and childcare—under certain conditions.
A welfare state that not only redistributes. but invests as well, is the core of a stable democracy.
In Greece, the tax bias is obvious: wage earners and pensioners pay a flat tax rate, while a sizable proportion of high incomes engage in tax avoidance. At the same time, bureaucracy acts as a second, invisible tax discouraging investment. Tax fairness has to be combined with administrative efficiency. According to data in the Treasury Financial Manual, which measures bureaucracy in 97 countries, Greece ranks first in the world in terms of the administrative burden imposed on businesses.
State reform, digitization, accountability and an appropriate and stable legal and institutional framework are the foundations of a fair tax system.
Experience shows that. for a major change to be sustainable, a social dialogue is needed, including groups of economists with opposing arguments, entrepreneurs, workers, local government and younger people. Taxing great wealth cannot be a technical-administrative decision. It requires in-depth knowledge of the workings of the economy and the consequences decisions can have.
The current political majority views of the European Commission and the European Parliament, as well as the Greek government, will not permit this debate to take place. But this is the truly progressive conversation.
PASOK, as the party representing modern social democracy in Greece, can raise the issue within the Socialists and Democrats group in the European Parliament and then with the European institutions. Because such an effort is institutional and would constitute substantive reform, in contrast to conservative inertia or proposals for funds to which the rich could voluntarily contribute, for instance.
