Denmark Pioneers a Proposed Wealth Tax Across Europe

Denmark Pioneers a Proposed Wealth Tax Across Europe

European Union Ponders Wealth Tax Amidst Climate Crisis and Inequality

The European Union (EU) is grappling with the urgent need for new funding sources to address climate change and economic inequality, as well as the controversial issue of a wealth tax. While recent international initiatives and proposals for a wealth tax in the EU are limited and cautious, the idea of taxing the ultra-wealthy remains on the table.

Currently, civil society organizations and trade unions have twice urged EU governments to agree on bold tax reforms, including an EU-level coordinated tax on extreme wealth. However, the wealth tax remains largely unadopted in Europe, with only Norway, Spain, and Switzerland levying net wealth taxes. Many other European countries have repealed them due to issues such as low revenue, high administrative costs, and adverse economic impacts, including disincentives to entrepreneurship and capital investment.

The European Commission, on the other hand, is focusing more on tax incentives for green investments and industrial decarbonization. For example, in July 2025, the Commission recommended targeted tax credits and accelerated depreciation measures to encourage investments in clean technology as part of the Clean Industrial Deal.

A key EU budget development is the Commission’s plan for a large budget for 2028-2034 (Multiannual Financial Framework), with some focus on climate and green spending. However, the Commission aims to raise additional revenues through mechanisms like the carbon emissions trading system and new excise duties, but remains constrained by EU rules that prevent the bloc from levying taxes directly.

Regarding the Danish EU Presidency in 2025, there is no explicit mention of a program proposing a wealth tax. However, the Presidency typically plays a crucial role in setting the agenda for Council discussions and can facilitate Member States’ negotiations on fiscal policy matters. Given the challenges in unanimity among Member States, as highlighted by ongoing proposals for new EU own resources and financial contributions starting in 2027 or 2028, the Danish Presidency could contribute by fostering dialogue and potentially advancing discussions on innovative EU funding mechanisms, albeit not specifically a wealth tax.

Support for taxing the super-rich is growing, with 77% of people across 13 countries expressing support for a political candidate who prioritizes taxing the wealthy and the fossil fuel industry. Clear evidence shows that billionaires and centi-millionaires pay proportionally less tax than ordinary people. To safeguard national competence on taxation, an EU agreement could focus on a set of common principles for such a tax, allowing national authorities flexibility in implementation.

The case for taxing extreme wealth has never been stronger, as it is about fairness, sovereignty, and restoring trust. Europe faces converging crises: rising inequality, climate collapse, democratic erosion, and austerity-driven public underinvestment. The only notable movement was a possible extension of the Carbon Border Adjustment Mechanism (CBAM) to additional sectors. However, extending the CBAM would compel companies from non-EU countries, including low-income nations like Zimbabwe and Mozambique, to contribute to repaying the EU’s Next Generation EU (NGEU) debt.

A self-reporting requirement for those with over $100 million in assets would provide much-needed oversight. Spain and Brazil have recently launched a platform for action to tax the super-rich. The EU now has a chance to join this initiative. Governments urgently need funding to ease the cost of living, build resilient public services, and invest in a liveable future.

In conclusion, while wealth tax proposals have been examined in some EU contexts, there is no active EU-wide initiative to implement one currently. Instead, the Commission and Member States emphasize alternative fiscal tools to meet climate and industrial goals, and the Danish EU Presidency’s role is likely more about progress in these broader fiscal and budget negotiations rather than directly introducing a wealth tax. However, the growing support for taxing the super-rich and the pressing need for new funding sources may push the EU towards reconsidering a wealth tax in the future.

1. Trade unions and civil society organizations within the European Union have advocated for a coordinated wealth tax among EU governments as part of the solution to address climate change and economic inequality.
2. Many European countries have abandoned wealth taxes due to concerns about revenue generation, high administrative costs, and adverse effects on entrepreneurship and investment.
3. Currently, the European Commission is focusing on tax incentives to encourage investments in clean technology and industrial decarbonization, such as targeted tax credits and accelerated depreciation measures.
4. Despite the lack of an active EU-wide wealth tax initiative, growing support for taxing the super-rich and the pressing need for new funding sources may encourages future reconsideration of a wealth tax within the EU.

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