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.