The Zucman tax is a proposal from economist Gabriel Zucman that would require the world’s billionaires to pay at least 2% of their total wealth in tax each year. Commissioned by Brazil’s G20 presidency and presented to finance ministers in 2024, it would apply to roughly 3,000 people worldwide and generate an estimated $200 to $250 billion in annual revenue.1Gabriel Zucman. A Blueprint for a Coordinated Minimum Effective Taxation Standard for Ultra-High-Net-Worth Individuals It is not a flat wealth tax. It is a floor.
How the 2% Floor Works
The mechanism is a top-up. If a billionaire’s existing income tax already reaches 2% of their net worth, nothing changes. The extra levy applies only to the gap between what they currently pay and the 2% mark.2G20 Brasil. At the G20, Brasil’s Proposal to Tax the Super-Rich May Raise Up to 250 Billion Dollars a Year
Consider someone with $10 billion in assets who pays $50 million in income tax. That works out to 0.5% of their wealth. Under Zucman’s framework, they would owe another $150 million to reach the $200 million floor. Someone else with the same $10 billion who already pays $250 million in tax owes nothing extra.
Countries would choose how to collect. Zucman’s report lists several options: a presumptive income tax, a broader definition of taxable income that captures unrealized gains, or a direct wealth tax.3EU Tax Observatory. A Blueprint for a Coordinated Minimum Effective Taxation Standard for Ultra-High-Net-Worth Individuals The instrument is up to each country; the 2% result is not.
Why Billionaires Pay So Little Today
The proposal exists because the wealthiest people consistently pay less, relative to their economic power, than middle-income earners. Research from the National Bureau of Economic Research found that the top 400 U.S. taxpayers paid an average effective tax rate of about 24% in 2018–2020, compared with 30% for the general population and 45% for top wage earners.4NBER. How Much Tax Do US Billionaires Pay? Evidence From Measured against total wealth rather than reported income, the gap widens further. The G20 report notes that many billionaires pay under 1.5% of their wealth in annual taxes across all levels of government.
The strategy that makes this possible is sometimes called “buy, borrow, die.” Gains on assets are not taxed until sold, so a billionaire whose stock portfolio doubles owes nothing as long as they hold the shares. When they need cash, they borrow against those appreciated assets rather than selling. Loan proceeds are not taxable income. When they die, the assets pass to heirs with a stepped-up cost basis, wiping out the accumulated tax liability on the appreciation.5Yale Budget Lab. Buy-Borrow-Die: Options for Reforming the Tax Treatment of Borrowing Against Appreciated Assets A lifetime of growth can go untaxed.
By anchoring the tax obligation to total wealth instead of realized income, Zucman’s 2% floor short-circuits the cycle. Borrowing against unsold assets is treated as what it functionally is: economic power that currently escapes the tax base.
Who Would Be Covered
The proposal applies to individuals with a net worth above $1 billion. Zucman’s 2024 report estimated about 3,000 people worldwide fall within scope.1Gabriel Zucman. A Blueprint for a Coordinated Minimum Effective Taxation Standard for Ultra-High-Net-Worth Individuals Not all of them would owe a top-up; only those whose current tax bills fall short of 2% of their wealth would.
The narrow threshold is deliberate. Focusing on billionaires alone sidesteps the political and administrative difficulty of taxing a broader group, while still capturing a disproportionate share of global assets. The classification looks at total economic footprint across jurisdictions, not just assets held in one country.
How Wealth Would Be Valued
Calculating who owes what starts with a full accounting of what a taxpayer owns. For most billionaires the largest component is equity in companies, both public shares and private business interests. Real estate, cash, bonds, and stakes in investment funds all count.2G20 Brasil. At the G20, Brasil’s Proposal to Tax the Super-Rich May Raise Up to 250 Billion Dollars a Year
Everything would be assessed at market value. That is straightforward for listed stock and considerably harder for private companies, art, and other illiquid holdings. Private equity valuations are subjective, and taxpayers have strong incentives to argue their holdings are worth less than an independent appraiser might find. Most of the administrative complexity of the proposal lives here.
Why It Needs International Cooperation
A minimum tax that only one country enforces is not a minimum tax. If billionaires can shift assets to a non-participating jurisdiction, the framework collapses. Zucman’s proposal depends on coordinated enforcement built on existing information-sharing infrastructure.
The main piece of that infrastructure is the Common Reporting Standard, adopted by the OECD in 2014 and now used by more than 100 jurisdictions. It requires financial institutions to report account information to tax authorities, who then exchange the data automatically with partner countries each year.6OECD. Consolidated Text of the Common Reporting Standard The billionaire minimum tax would need this transparency to expand, especially around beneficial ownership of trusts, shell companies, and layered corporate structures. Zucman has separately called for a global financial registry to track cross-border asset ownership, though the specifics within this proposal remain underdeveloped.
Where the Proposal Stands
The G20 leaders’ declaration from the November 2024 Rio de Janeiro summit acknowledged the issue but did not endorse Zucman’s specific framework. Leaders said they would “seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed,” and referenced sharing best practices and building anti-avoidance mechanisms.7G20 Research Group. G20 Rio de Janeiro Leaders’ Declaration Diplomatic language for keeping the conversation open, not for acting.
South Africa’s 2025 G20 presidency listed “fair international taxation regimes, including taxation of the super-rich” among priorities carried forward from Brazil.8G20 South Africa. G20 Presidency Brazilian officials described the blueprint as a technical document meant to feed political discussion, with no timeline for advancing it.2G20 Brasil. At the G20, Brasil’s Proposal to Tax the Super-Rich May Raise Up to 250 Billion Dollars a Year
The most relevant precedent is the OECD’s global minimum corporate tax, known as Pillar Two, which set a 15% minimum effective rate for large multinationals and has been adopted or is being implemented by dozens of countries. Zucman’s proposal asks whether the same logic should apply to individuals. The corporate version took about a decade from concept to implementation, and a personal-wealth equivalent would likely take a similar road.
Why the United States Is a Problem
The U.S. is the most consequential holdout. In January 2025, House Ways and Means Republicans introduced the Defending American Jobs and Investment Act (H.R. 591), which would impose retaliatory tax increases on foreign investors and corporations from countries adopting “extraterritorial or discriminatory taxes” targeting U.S. businesses. Committee Chairman Jason Smith said Congress would “never approve of surrendering America’s taxing authorities to foreign capitals.”9Ways and Means. Ways and Means Republicans Introduce Legislation to Reinforce Trump Administration’s Rejection of Biden Global Tax Surrender
Even if political conditions changed, the U.S. faces a constitutional obstacle most other countries do not. The Constitution requires “direct taxes” to be apportioned among the states by population, so a state with 10% of the population would owe 10% of the total revenue regardless of its residents’ wealth.10Constitution Annotated. ArtI.S9.C4.1 Overview of Direct Taxes The Supreme Court has treated taxes on personal property as direct taxes, and a wealth tax almost certainly qualifies. Apportionment would produce absurd results, with residents of states holding fewer billionaires taxed at higher rates to hit their assigned share.
The 2024 Supreme Court decision in Moore v. United States did not resolve whether Congress can tax unrealized gains. The majority explicitly declined the question, calling those “potential issues for another day.”11Supreme Court. Moore v. United States Until the Court addresses whether unrealized appreciation is taxable income under the Sixteenth Amendment, any U.S. version of a billionaire minimum tax carries real legal risk.
Revenue and the Main Objections
Zucman puts annual revenue at $200 to $250 billion from around 3,000 taxpayers.1Gabriel Zucman. A Blueprint for a Coordinated Minimum Effective Taxation Standard for Ultra-High-Net-Worth Individuals Supporters argue that money could help close financing gaps for climate action, pandemic preparedness, and poverty reduction.
Critics push back on several fronts. The most basic is feasibility: valuing the entire asset portfolios of thousands of individuals across dozens of jurisdictions, every year and accurately, has no real precedent. Legal scholars have also questioned whether the proposal fits within existing international tax frameworks, since the bilateral treaty system was not designed to coordinate wealth-based levies.12Kluwer Law Online. Debate: A Critique of Gabriel Zucman’s 2% Billionaire Tax
There is also the question of where the money goes. Revenue would be collected by the country where the billionaire resides or holds nationality, not distributed globally. One critic noted the development-goal promise “will only take place if that Member State then allocates funds to the realization of the sustainable development goals in countries other than their own.” The countries most in need of the revenue are not necessarily the ones that would collect it.
Defenders reply that an imperfect system beats a status quo in which some of the wealthiest people pay effective rates lower than schoolteachers. Universal adoption is not required; if the handful of countries where most billionaires live participate, coverage is substantial. Whether that political will materializes is the open question.