How do we get to a fairer world?
Chapter 6
Radically Normal, part 6 of 7 · Series overview · Dieses Kapitel auf Deutsch
“That all sounds nice — but how could it ever actually work?”
The short answer: The tools have existed for a long time, but the will is not there yet.
The 10x world is an admittedly utopian goal, whose purpose is to give us moral and practical orientation. Given the prevailing balance of power in the world, it cannot be enforced directly.
By definition, a 10x world becomes impossible if some countries refuse to take part. That is exactly why it matters so much that we see ourselves as individually responsible people who decide together how we want to arrange the balance of power among us.
The most important building block on the way to a more equal society is a progressive tax system — meaning that higher wealth and higher incomes are taxed at higher rates. Such a system leans on taxes that, by their very nature, fall mainly on wealthier people, and avoids taxes that hit the everyday spending of most people.
Because wealth inequality is far greater than income inequality, such a system should tax wealth above all, and burden income from work less.
The floor needs a safeguard of its own — most obviously a basic income that guarantees the basic basket of goods for everyone. It is the counterpart to the ceiling: without a secured baseline, any range above that would be mere rhetoric.
There is a widespread assumption I want to push back on here: the point is not to tax extremely rich people in order to fund government spending. A state with its own currency can, in principle, pay for anything it decides to (that is the view of a growing school of economic thought that I find very convincing).
For the eurozone, this holds so far only to a limited extent — not out of economic necessity, but because of self-imposed shackles: the direct line between the central bank and fiscal policy has been cut by treaty, and a common fiscal policy is missing. The United States shows how it can be done differently: in that country, the currency sits with the federal government — and with it the fiscal firepower that the individual states lack.
Taxation serves more to pull money out of the economy where it would otherwise be inflationary, to curb harmful behaviour by economic actors, and — not least — to counteract an uncontrolled accumulation of wealth-based power.
This is not a contradiction of the calculation from Chapter 4, but its flip side: we are not redistributing sums of money, but claims on real resources such as labour, raw materials, and housing. A wealth tax reduces those claims. That also takes the pressure out of the bidding war over scarce goods. In this way we create room to raise the claims at the bottom of the distribution without driving prices up.
Wealth and inheritance
The goal of taxing wealth and inheritance would be to narrow the gaps in wealth, with an end goal of 10x. The main instrument would be a wealth tax that applies to very high net worth. The threshold would follow the 10x principle and take the respective purchasing power into account.
For context: Gabriel Zucman considers a levy of 2–3% per year on very large fortunes internationally enforceable — as a brake on concentration. Piketty goes further, up to rates that would actually melt large fortunes down. Above the 10x threshold, the levies would have to exceed the return on capital, so that fortunes shrink steadily over the years and across inheritances. That is not a side effect; it is the point.
At the same time, the build-up of wealth within dynasties would be made harder through more consistent taxation of inheritance — including for me, should I one day inherit from my parents. Loopholes via foundations would be closed off, and exemptions sharply limited. We often hear the argument that family-run businesses need exemptions so they are not crushed by the burden of the tax bill. Such exemptions can exist — but they have to be narrowly defined and tied to clear conditions, so that those who do not need them do not benefit.
One complication is that the size of a fortune can be hard to pin down, depending on the type of asset. For real estate and stock holdings it would be easiest. Shares in companies not listed on the stock exchange could be valued through standardised processes, with the publication of key business figures made mandatory. Above all, with illiquid and unique goods such as works of art, legal disputes are likely — and for that we would need rules and institutions for fair and efficient resolution.
And where ongoing valuation remains too costly, there is a natural valuation event: inheritance — wealth changes hands there anyway and has to be priced, which is why inheritance taxation is the strongest channel, from an administrative point of view, for melting fortunes down.
A further difficulty is identifying the actual owners of companies. For this there would need to be publicly accessible ownership registers, or at least ones that tax authorities can see. The Open Ownership initiative could point the way here. Moving one’s residence to another country is also a popular way to escape taxation at home.
A side effect of consistent international taxation of wealth and inheritance would probably be a deflation in the prices of financial assets, which would bring 10x closer directly. The reasons would be a greater need for liquidity and a reduced appeal of unproductive assets such as gold and Bitcoin.
At this point one might object: what happens to the savings of ordinary people who have invested in such assets? The truth is that those prices would likely fall sharply. These assets only reached their current high value in the first place because they are parking spots for surplus capital — parking spots that yield all the more, the more people let themselves be tempted into them.
In a 10x world they would lose much of their appeal. But that does not mean that someone who put all their money into Bitcoin would have to fear for their survival. Because in a 10x world, your security no longer hangs on your portfolio: enough housing, healthcare, and general provision would be guaranteed regardless of what anyone had bet on. What is at stake then is only rank, not existence.
So who owns large companies, then? No one alone — they would be in dispersed ownership: millions of people holding small stakes, directly, through funds, or through employee ownership. That this can work is something cooperatives and foundation-owned companies like Bosch already show today. Foundations as a tax shelter are one thing; foundations that permanently own capital in place of a private person are another. How control over dispersed capital gets organized democratically is an open design question. The problem can be solved, as you can observe in corporations which already lack a majority shareholder today.
Wealth taxes, by the way, would not be revolutionary at all: in the decades after the Second World War they were common in many industrialised countries. France, Germany, and Switzerland levied annual wealth taxes for a time (Switzerland still does), and the United States charged top rates of up to 77% on large inheritances.
But let’s be honest: numerous countries, including Sweden, France, and Germany, later rolled back or scaled down their existing wealth taxes. The reasons given were the difficulty of valuing wealth, capital flight, and ultimately also often disappointing revenues.
But these weaknesses lie in the design of the respective taxes, not in the idea itself. The fact that Switzerland has levied wealth taxes smoothly for decades proves at least that collection and valuation are workable. And Norway shows the dynamic of capital flight and countermeasures: after a slight increase in the wealth tax, some millionaires moved to Switzerland — however, there are indications that the actual reason was that a significant tightening of the exit tax was imminent. That very sequence is the argument for coordination over going it alone.
I have sketched a few instruments here: standardised valuation and reporting requirements against the valuation problem; automatic exchange of information and exit taxes against capital flight; international coalitions against the race to the bottom on taxes.
Income tax
The simplest instrument is sitting right outside the door: capital income must be taxed at least as progressively as income from work. Today the opposite holds. In Germany, someone living off dividends and capital gains pays a flat rate of just over 26 percent under the so-called Abgeltungsteuer, while someone earning the same amount through work pays up to 47.5 percent. Germany is no outlier in this.
A tax system could hardly state more plainly whose income it protects. Yet the logic of the 10x principle is unambiguous: growth in wealth is income — so it belongs in the same tax category, not in a discounted category of its own. It also takes work off the wealth tax’s hands: a progressive tax on capital income lowers the net return, and with it the hurdle a wealth tax has to clear in order to melt fortunes down. And the old main argument for the discount — the fear of capital flight — has become less on an issue since the automatic exchange of information began. There are no valuation questions here, no constitutional problems. Of all the tools in this chapter, this is the one closest to hand.
Alongside a generally much more progressive income tax that finally includes capital income, the adequate taxation of corporate profits is the biggest lever for working towards a 10x income goal. Today the effective tax burden of international corporations, especially those in the digital sector, is many times lower than that of an average employee. This is mainly because companies can pay tax on their profit in a place with low corporate taxes, regardless of where that profit was generated.
Typically, companies report at most their revenues, but not their profits, in the various markets. Yet it is precisely this profitability per market that is a decisive criterion for these firms in deciding where to invest. This is exactly where a local taxation of profits would have to start, along the lines of: if you make a profit with our citizens, then you pay your taxes here.
One approach to this is so-called formulary apportionment: a corporation’s global profit would be distributed, according to a uniform key — such as revenue, number of employees, or share of capital — across the countries in which it operates. This does not mean that revenue is equated with profit, but rather that known quantities like revenue and employment serve as proxies to allocate a fair share of the global profit. This would prevent companies from artificially shifting profits into low-tax countries. It would ensure that, for incomes too, the 10x goal is not hollowed out by tax tricks.
Exchange of information
Before any taxation can happen, governments need to have the relevant information. The company-ownership registers already mentioned would have to be expanded in order to identify “beneficial owners.” Tax authorities must be able to exchange relevant information automatically. With the Common Reporting Standard (CRS), the OECD has already created a framework in which this would be possible, as have the United States with FATCA. Digitising tax administrations and introducing standardised valuation rules for wealth are essential for this. In general, strong and adequately funded institutions are needed.
Do these rules sound draconian? I think it is like all the rules we collectively impose on ourselves as a society. As long as there is the social will for it and human dignity is not undermined, such restrictions on personal or entrepreneurial freedom are fundamentally possible.
To be clear: a 10x end state does not fit within today’s legal framework — neither the property guarantee of Germany’s Basic Law nor EU law on the free movement of capital. Whoever pursues such a goal must want legal change; that is no scandal, but the normal course of democratic history. The first steps, by contrast — equal taxation of capital and work, a measured wealth tax, tighter inheritance rules, EU-coordinated exit taxation — are possible within the current framework.
Enforcement
But all these measures remain symbolic if they cannot be enforced. That is why there must be effective means of sanction for those who evade taxation. And these sanctions have to be painful enough that trying becomes too risky.
The greatest risk, as described above, is that some countries will not want to take part. That has so far been the essential hurdle in implementing worldwide corporate taxes under OECD Pillar Two (the global minimum tax).
The most important factor for changing a state’s non-participation would be its own population, recognising its responsibility and taking it seriously. Should that alone not be enough — most likely in non-democratic countries — pressure would have to be built from outside. To that end, the countries that commit to a 10x goal could set up tariffs and other trade barriers, and even impose sanctions on the decision-makers in those countries. The mere threat could be enough to bring about a change of course.
Companies that evade taxation could be put under pressure by being denied access to the infrastructure in the markets where they are liable for tax. That could include access to government contracts and public infrastructure — to ports and airports, and where appropriate to digital infrastructure as well.
Besides classic sanctions, states can also create pressure via the financial markets: funds that want to be marketed in a country could be required to disclose or wind down their holdings in non-cooperative tax havens or companies. The state cannot prescribe everything directly — but transparency requirements and disclosure increase the pressure from investors and the public.
And individuals who move their residence to a still-existing tax haven could be hit with an exit tax, as the United States already does today.
Honestly, convincing individual states is the hardest part of the undertaking. Sanctions hurt both sides, larger economies can resist more easily, and the attempt to introduce a global minimum tax shows just how stubborn the resistance is.
Sequence
• Phase 0: Establish measurement and transparency — define the basket of goods and purchasing-power-parity (PPP) benchmarks, registers of beneficial owners, automatic exchange of information (CRS), public country-by-country reporting by corporations, digitised tax administrations.
• Phase 1: What can be done nationally right away — move capital income into the progressive income tax schedule, a national wealth tax and tighter inheritance rules, basic-income pilot programmes to secure the basic basket of goods, EU-coordinated exit taxation; enforce the minimum tax under OECD Pillar Two.
• Phase 2: Build coalitions — agree on local taxation of corporate profits along formulary-apportionment lines; tie infrastructure access and fund authorisation to compliance; standardise valuation and dispute procedures.
• Phase 3: Global harmonisation — gradual tightening towards 10x, raising floor and ceiling together, ongoing calibration with PPP data and progress indicators; tariffs and sanctions against blocking states as a last resort.
The measures I have sketched here are not a blueprint. They are neither the last word in wisdom nor would they be easy to implement. But they show that it is, in principle, possible to shift inequality towards a 10x world. Whether that succeeds depends less on the technical details of the measures than on the willingness of all of us to take responsibility and to demand these rules. But such political will has to be built over years.
I can already hear the objections: “That’s naïve, it’ll never happen.” But here we should distinguish whether we are disputing that something is possible, or disputing that it is wanted. A 10x world is fundamentally feasible — no economic law rules it out. This is clearly about will.
That will, admittedly, is unevenly distributed on this question. The greater part of humanity would be on the winning side. The strongest incentive to be against it lies with those who would lose by far the largest part of their wealth — but who also have the greatest levers to prevent a 10x world. What matters most, in my view, is the will of people like me. The ones who, in case of doubt, make themselves comfortable. Here we find the people whose will, on this question, really counts.
I can’t guarantee anything. But “impossible” is the wrong word. What a broad majority of people genuinely want over time, they have, in the end, mostly gotten.
Justice is by no means a political dead end: in Hungary, the newly elected government is planning an annual wealth tax on very large fortunes, and in California a billionaire tax qualified in 2026 for a statewide ballot vote. And a growing number of very rich people are now calling on governments to tax them more heavily — not by donation, but by law.
Momentum is possible.