Time for a European wealth cap?

Across Europe, polarisation dominates public debate. Trust in institutions is fragile, social tensions are rising, and many citizens feel disconnected from political and economic decision-making. Yet, paradoxically, Europe is living in one of the wealthiest eras in human history. Despite persistent inequalities, technology, healthcare, and education are more widely accessible than ever before, expanding access to knowledge, services, and opportunities.

The issue is simple: millions of Europeans feel excluded from the seemingly rising prosperity. This contradiction raises a crucial question: why does economic progress coexist with deep social dissatisfaction? One powerful explanation lies in the growing concentration of wealth: one of the strongest predictors of democratic erosion is economic inequality. When wealth accumulates in the hands of a small minority, influence over politics, the economy, and society tends to concentrate too.

While the richest grow ever-richer, the rest of society increasingly grows disconnected from the decision-making process. The result is a deepening social, economic, and democratic crisis. Europe therefore faces a fundamental choice: continue to allow wealth and power to concentrate, or to take action to protect democracy, fairness, and social cohesion — the very values on which the EU was founded.

The staggering scale of wealth concentration

The scale of global inequality today is striking. According to the latest World Inequality Report, the richest 10% of humanity hold 75% of global wealth, while the poorest 50% share just 2%. Oxfam International similarly found that the top 1% owns nearly half of all global financial assets.

A key driver of this concentration is the ability of the ultra-rich to use legal mechanisms to minimise taxation. For example, billionaires frequently borrow against their stock holdings rather than selling them, allowing their wealth to grow without triggering taxable income. This translates to fortunes expanding far faster than ordinary wages.

Take another example: if wages for a typical worker had grown at the same rate as CEO compensation over the past fifty years, their earnings would look dramatically different. As a result, in the US, wealth is now concentrated in the hands of a tiny minority at levels comparable to those seen when France was ruled by monarchs claiming divine right. The dynamics of extreme wealth accumulation and political influence are almost just as visible in Europe.

Wealth, the media, and the roots of political power

Extreme wealth also shapes public discourse. On the one hand, rising personal inequality in Europe helps fuel recent populist movements. On the other hand, the concentration of media ownership among the ultra-rich gives them disproportionate influence over public opinion and political debates.

In the UK, three companies control around 90% of national newspaper circulation. In France, approximately 90% of the economic press is owned by four billionaires. Such concentration of media ownership allows wealthy individuals to shape the public narrative, influence policy debates, and marginalise alternative perspectives. It gives them political power.

Economic inequality is not just about money, it is changing how democracy works, and Europe is not immune. As the gap between rich and poor grows, trust in institutions falls, social cohesion weakens, and people start to feel that democracy no longer serves them. When citizens see governments favoring elites, their engagement drops, confidence fades, and the European project itself is put at risk.

Political influence extends beyond media ownership. Lobbying and campaign financing enable wealthy individuals and corporations to shape legislation directly. In countries like Germany and France, significant donations from individuals to political parties remain legal, allowing the ultra-rich to exercise disproportionate influence over public policy. In reality, a minor, wealthy elite hold more political power than the millions of ordinary voters put together.

The persistent myth of meritocracy

Wealth is rarely created in isolation. It is produced within a social system that includes public services, education, infrastructure, legal institutions, and the labour of countless individuals. Yet, the rewards of this collective system are distributed unequally. The popular narrative of the “self-made man” often obscures how policy frameworks, tax systems, and inheritance structures shape wealth accumulation.

Much of the justification for extreme wealth rests on the idea of meritocracy, the belief that wealth primarily reflects talent, effort, and innovation. However, evidence suggests a different story. Critically acclaimed economist Thomas Piketty demonstrated that the share of inherited wealth in total wealth has grown steadily since the 1970s. In France, inherited wealth accounted for roughly two-thirds of private capital in 2010. Without intervention, extreme fortunes are proven to reinforce themselves across generations and consolidate political power in the hands of a small elite.

The huge social costs of inequality

The consequences of inequality are visible across Europe. In 2024, almost 100 million people in the European Union — that is 21% of the population — were at risk of poverty or social exclusion. Nearly one in four children in Europe face similar risks, not protected any longer by the existing welfare systems. These figures do not reflect a lack of resources. Instead, they point to a lack of prioritisation in how wealth is distributed and invested.

Beyond the unfairness of this situation, the failure to address child poverty entails significant long-term social and economic losses. The result is a Europe where economic growth exists, but prosperity is unevenly shared. Social mobility declines, public services struggle with underfunding, and the promise of equal opportunity weakens. Extreme wealth concentration threatens not only economic fairness, but also the solidarity and cohesion that bind European societies together.

The growing gap between the super-rich and ordinary workers raises a striking question: if poverty is widely seen as a social problem, why is extreme wealth not? Economist and philosopher Ingrid Robeyns offers one answer with the idea of limitarianism. She argues that there should be a ceiling on how much wealth a person can have. Beyond that point, extra wealth does not just harm society at large, it no longer even improves a person’s life in any meaningful way.

A political and a social challenge

Philanthropy alone has not managed so far to offset the widening gap. There is sound evidence that the richest individuals are not necessarily the most charitable. Wealthy individuals often contribute proportionally less to the public good than middle-income taxpayers.

At the same time, public opinion consistently favours stronger redistribution. Polling across countries shows broad support for higher taxation on extreme wealth, reflecting a widespread recognition that reducing inequality is essential for maintaining a fair and functional society. Extreme wealth concentration is proving to be not only an economic issue, but a political and a social challenge as well.

Historically, governments have taken steps to curb extreme inequality. Between 1932 and 1980, top marginal income tax rates reached 81% in the US and 89% in the UK. These policies kept extreme wealth in check even as the economy boomed. However, the wealthy no longer contribute with such amounts.

Could a wealth cap really be the answer?

Today, wealth itself is barely taxed, ten EU countries have no inheritance tax, and only Spain has a net wealth tax. Research suggests that the ultra-rich often face lower effective tax rates than the general population. Against this backdrop, several ideas have appeared. At present, economists such as Gabriel Zucman have proposed stronger wealth taxation, including his well-known proposal for a 2% annual global wealth tax on the ultra-rich.

More ambitious perhaps, building upon the philosophy of limitarianism, is the idea of a wealth cap. A wealth cap would place a limit on the accumulation of extreme wealth, preventing any individual from amassing fortunes large enough to dominate economics or politics. The Wealth Cap Project is a Europe-wide initiative advocating for a standardised limit on extreme wealth accumulation at the European level.

Through our Wealth Cap Declaration, we are calling on citizens, policymakers, and institutions to work together to restore balance in European societies. Rooted in the founding aims and values of the EU of solidarity, democracy, and social cohesion, this initiative aims to ensure that prosperity benefits society as a whole. A wealth cap, in this sense, is not simply a fiscal policy: it is a statement of values.

Prosperity must be shared, democracy must be protected, and European societies must remain inclusive, sustainable, and fair. For Europe to thrive, wealth must serve society, not simply allow a few to dominate it. Europe now stands at a crossroads: will wealth and power continue to concentrate in the hands of a few, or will policymakers do what it takes to protect democracy, social cohesion, and the common good?