Tax rates on the richest Europeans and largest corporations decreased in the last decades while tax rates on consumption and labour increased.
Nearly 300,000 Europeans signed a petition asking the EU to tax the richest.
Taxes that disproportionately affect ordinary Europeans – consumption and labour taxes – bring in 13 times more revenue than taxes on wealth, which are paid mainly by the super-rich, according to a new analysis by Oxfam. In 2022, consumption taxes like VAT and labour taxes made up almost 8 out of every 10 euros of the total tax revenue in EU countries, while taxes on wealth contributed less than 60 cents for every 10 euros collected.
In 2022, the wealthiest 1 percent held a quarter of the net personal wealth in the EU. The ultra-rich – the top 0.001 percent and accounting for roughly 3,650 individuals – saw their wealth increase by 237 percent, inflation included, between 1995 and 2021. Yet, their wealth contributes far less to governments’ coffers than taxes on wages or consumption, which tend to fall more heavily on ordinary people.
Chiara Putaturo, Oxfam EU tax expert, said: “We are told again and again that there is not enough money to improve the lives of ordinary people or fight the climate crisis. Yet, the facts tell a different story. The ultra-wealthy hoard more than they can spend while dodging taxes; and the rest of us shoulder most of the tax burden while trying to make ends meet. A European wealth tax is not only urgent, it’s fair”.
Oxfam’s analysis also shows that the richest individuals and biggest companies have been paying less taxes. Between 2000 and 2023:
- The top personal income tax rate on the EU’s richest fell from 44.8 to 37.9 percent.
- The top tax rate paid by the EU’s largest corporations collapsed from 32.1 to 21.2 percent.
In contrast, taxes on ordinary people have risen. Between 2010 and 2022:
- The tax rate on labour in the EU increased from 33.3 to 34.8 percent.
- The tax rate on consumption rose from 17.7 to 18.7 percent.
“Rather than tackling the growing inequality crisis, Europe’s tax systems are making the wealth gap worse. But there is a silver lining with a growing consensus among policymakers, like the G20 finance ministers, on the need to tax the super-rich. And it is not just politicians, Europeans are increasingly demanding a wealth tax”, said Putaturo.
Notes to editors
Chiara Putaturo is available for interview and comment.
Oxfam analysis is based on data from Eurostat and the European Commission.
Data on individual EU countries is available on request.
According to Eurostat data and the EC data on taxation trends:
EU (average EU countries) revenue in 2022 Revenue from consumption taxes Revenue from labour taxes Revenue from taxes on capital stock Revenue from taxes on capital income (including corporate income) As % of total tax revenue 27.3% 50.6% 5.8% 16.2% As euros 1.73 trillion 3.23 trillion 374 billion 1.03 trillion
- The contribution of taxes on consumption and labour account for 77.9% of total tax revenues and represents 13.3 times the taxes on capital stock.
- Between 2000 and 2023, the top personal income tax rate fell from 44.8% to 37.9% and the top corporate income tax rate dropped from 32.1% to 21.2%.
- Between 2010 and 2022, the "implicit tax rate" on labour in the EU increased from 33.3% to 34.8% and the "implicit tax rate" on consumption increased from 17.7% to 18.7%.
Labour and consumption taxes account for a higher proportion of income for ordinary citizens. While wealthy individuals also pay taxes on their work income and consumption, these contribute to a smaller proportion of their overall income due to other income sources, like wealth. Wealthy people also tend to spend a lower proportion of their income on consumption. This is because a higher proportion of poorer people’s income is used to buy essential goods and services such as food.
The European Commission’s 2024 Annual Report on Taxation states that wealth taxation is gaining “traction globally” as a tool to “ensure a fairer sharing of the tax burden across individuals”. The report includes the World Inequality Lab estimations on EU wealth distribution.
Based on Oxfam’s report “Inequality Inc.”, Oxfam calculates that:
- A progressive wealth tax on the EU’s multi-millionaires and billionaires up to 5% could generate 286.5 billion euros each year (785 million a day or 32.7 million per hour). This could fund more than 3 times the EU’s 7-year aid budget (78.6 billion euros).
Oxfam is supporting, together with politicians, economists like Thomas Piketty and multi-millionaires like Marlene Engelhorn, a European Citizens Initiative for a European wealth tax. The European Citizens' Initiative allows EU citizens to call on the European Commission to propose new legislative initiatives if 1 million signatures are reached. The deadline for signature collection is 9 October 2024. Nearly 300,000 people have signed as of 5 September.
Last July, G20 finance ministers agreed to cooperate to tax the ultra-rich. Several organisations handed in petitions with over 1.5 million signatures from people across the world calling on them to tax the ultra-wealthy.
Contact information
Julia Manresa at Julia.Manresa@oxfam.org | Work at +32 473 87 44 26 | WhatsApp only +32 479 56 18 12
Jade Tenwick at jade.tenwick@oxfam.org | Work: +32 473 56 22 60 | WhatsApp only +32 484 81 22 94
For updates, please follow @OxfamEU. You can also find us on LinkedIn.
Chiara Putaturo is available for interview and comment.
Oxfam analysis is based on data from Eurostat and the European Commission.
Data on individual EU countries is available on request.
According to Eurostat data and the EC data on taxation trends:
| EU (average EU countries) revenue in 2022 | Revenue from consumption taxes | Revenue from labour taxes | Revenue from taxes on capital stock | Revenue from taxes on capital income (including corporate income) |
| As % of total tax revenue | 27.3% | 50.6% | 5.8% | 16.2% |
| As euros | 1.73 trillion | 3.23 trillion | 374 billion | 1.03 trillion |
- The contribution of taxes on consumption and labour account for 77.9% of total tax revenues and represents 13.3 times the taxes on capital stock.
- Between 2000 and 2023, the top personal income tax rate fell from 44.8% to 37.9% and the top corporate income tax rate dropped from 32.1% to 21.2%.
- Between 2010 and 2022, the "implicit tax rate" on labour in the EU increased from 33.3% to 34.8% and the "implicit tax rate" on consumption increased from 17.7% to 18.7%.
Labour and consumption taxes account for a higher proportion of income for ordinary citizens. While wealthy individuals also pay taxes on their work income and consumption, these contribute to a smaller proportion of their overall income due to other income sources, like wealth. Wealthy people also tend to spend a lower proportion of their income on consumption. This is because a higher proportion of poorer people’s income is used to buy essential goods and services such as food.
The European Commission’s 2024 Annual Report on Taxation states that wealth taxation is gaining “traction globally” as a tool to “ensure a fairer sharing of the tax burden across individuals”. The report includes the World Inequality Lab estimations on EU wealth distribution.
Based on Oxfam’s report “Inequality Inc.”, Oxfam calculates that:
- A progressive wealth tax on the EU’s multi-millionaires and billionaires up to 5% could generate 286.5 billion euros each year (785 million a day or 32.7 million per hour). This could fund more than 3 times the EU’s 7-year aid budget (78.6 billion euros).
Oxfam is supporting, together with politicians, economists like Thomas Piketty and multi-millionaires like Marlene Engelhorn, a European Citizens Initiative for a European wealth tax. The European Citizens' Initiative allows EU citizens to call on the European Commission to propose new legislative initiatives if 1 million signatures are reached. The deadline for signature collection is 9 October 2024. Nearly 300,000 people have signed as of 5 September.
Last July, G20 finance ministers agreed to cooperate to tax the ultra-rich. Several organisations handed in petitions with over 1.5 million signatures from people across the world calling on them to tax the ultra-wealthy.
Julia Manresa at Julia.Manresa@oxfam.org | Work at +32 473 87 44 26 | WhatsApp only +32 479 56 18 12
Jade Tenwick at jade.tenwick@oxfam.org | Work: +32 473 56 22 60 | WhatsApp only +32 484 81 22 94
For updates, please follow @OxfamEU. You can also find us on LinkedIn.