Talking With Gabriel Zucman

On Europe, oligarchy and more

I spoke Thursday with Gabriel Zucman, one of the world’s leading experts on inequality and tax evasion/avoidance, and also an important player in European policy debates. I’m going to add one of his charts, which comes up later in the discussion:

Transcript follows:

. . .

TRANSCRIPT:
Paul Krugman in Conversation with Gabriel Zucman

(recorded 1/22/26)

Paul Krugman: Hi everyone. It’s been a week with a lot of confrontation between the US and Europe, especially with Davos, and this seemed like a good time to talk about all that, but also a bunch of other things with Gabriel Zucman, who is one of the leading figures in economic discourse in general—especially inequality and tax evasion—but very much from the European perspective. Gabriel is one of the go-to people on multiple issues and is a voice that is actually affecting policy debate in Europe, which is really saying something.

Gabriel Zucman: Hi, Paul. Thanks a lot for having me. Yeah, I’m new to Substack and I just launched my newsletter a few weeks ago and you’re a big part of the reason why I jumped in. I’ve been really inspired by how you use it with charts and figures. So thanks a lot for the writings and thanks for the invitation.

Krugman: Well that’s great. I actually didn’t know you were on, which is terrible. I’ll fix that now. But yeah, Substack is great, and what I particularly like is that without working for a proper publication, you don’t have to work really hard to make the charts pretty. As long as they convey the information, it’s good enough.

But anyway, we just had an extraordinary performance by my president (God help me) and his officials in Davos. Why don’t you tell me what you think just happened, let me get your take on it, and then we can talk about the bigger issues.

Zucman: Yeah, I mean, to me, it’s a little bit the continuation of what started last year. You know, in the spring of 2025, the US administration negotiated with the EU on trade and tariffs, and the US imposed a 15% across the board tariff on the EU and the EU decided to do nothing—no countermeasure, no retaliation—in the hope that it would be the end of it, it would bring stability. And we were many at the time to say that’s quite unlikely to happen because this type of extortion with Trump never ends. And so now we have the threats over Greenland and the threats of additional tariffs. Trump has walked back his threat to actually use military force to invade Greenland or to use tariffs but I don’t think that’s the end of it.

The fundamental problem is how does Europe stand up for good to Trump, such that this type of blackmail ends once and for all.

Krugman: Okay. We’re actually recording this on Thursday morning, and the headlines say that Europe is still reconsidering its trade relations with the United States, as well it should. But Europe came much closer to actually being ready to retaliate this time, right? There’s what people are calling “the bazooka.” And France was actually all ready to unleash it, more so than Germany, right?

Zucman: Yeah. The bazooka is the now famous anti-coercion instrument of the EU that essentially allows the EU to retaliate across a number of dimensions, restricting market access, intellectual property, targeted measures on people close to the foreign government that’s attacking the EU.

It’s brand new. It was adopted in 2023. It’s never been used and it’s a powerful tool. But also there is a concern about whether the EU will actually use it because it requires a so-called qualified majority of member states to be activated. That means you need at least 15 member states out of 27 to agree to use the bazooka. And there are many member states, especially smaller countries, that don’t really want to anger Trump too much. And so even if France said, “okay, we might consider using it,” it is actually not clear if there is a majority at the moment in the European Union who might sign on to use that powerful bazooka.

Krugman: Okay, then I’ve been excessively optimistic. But this is a situation where Hungary and Czechia can’t veto it. So it’s not unanimity, but you’re saying that it may not actually be enough members even so.

Zucman: You need 15 member states out of 27. But we don’t really know what it can do in practice, what it would mean. Again, it’s never been used. I’ve been trying to argue that what the EU should consider is doing very targeted measures on oligarchs, kind of tariffs for oligarchs. If you look at who’s supporting an invasion or annexation of Greenland in the US, it’s essentially almost nobody. There is virtually no support for these types of things, except perhaps some people in the business community that think that there is a commercial, perhaps even a tourism opportunity.

Actually, Project 2025 refers to Greenland not as a national security issue at all but as a commercial and tourism opportunity. And there was a very good article by Casey Michel in the New Republic a few days ago about the big money interests behind some intervention in Greenland, and that includes some extractive industries, some people in tech, some people in Wall Street, close to Trump. And so the idea of having kind of very tiny measures on those oligarchs seems appealing. It would open up a kind of two-front struggle against Trump, both on the EU against Trump and internally, the Trump administration facing tremendous opposition to this type of intervention.

Krugman: Yeah, I wonder whether these guys have actually thought it through. I mean, as far as I can make out, the commercial potential in Greenland is de minimis in reality, but who knows? But a lot of people, even on the left, are sure that there’s some fundamental corporate drive behind Greenland. And I actually think that it’s mostly that Greenland looks really big in a Mercator projection.

Zucman: I’m sure that’s a big part of it, yes.

Krugman: And there’s been a lively debate about European economics. I mean the whole Trump team went and basically trash-talked the European economy while in Davos. So why don’t you talk about what you’ve been writing and then we can go back and forth on that a bit.

Zucman: Yeah, I think that’s really interesting. So there is this prevailing view that the U.S. is pulling ahead economically and even more so that Europe is stagnant, burdened by regulations and taxes and what have you. You hear it all the time, especially coming from the Trump administration. So it features prominently in the national security strategy. It was all around in Davos this week. But it’s also something that many leaders in Europe believe in. They think, “Wow, Europe is really lagging behind.” And so there’s a whole process of deregulation taking place to try to address this supposed lack of competitiveness. The European Parliament is voting on a big so-called omnibus bill that’s just a bunch of cutting regulations and stuff.

And so it’s important to look at the numbers to get this right. And I’m not a macroeconomist. I’m mostly interested in inequality. But the work on inequality that I do, the statistics that I produce and update very regularly, they are all anchored onto the macroeconomic totals of the US, for instance. It’s this project of creating distributional national accounts.

Krugman: Right.

Zucman: And so I look at the national accounts statistics very regularly. And it turns out that if you look at the numbers, this idea that the US is pulling ahead, Europe is lagging, is essentially a myth. I’ve run the numbers and I think there are a bunch of things that are interesting to note. So number one, the economic growth of the US over the last 15 years has been poor. There is this view that with the rise of tech since 2010, there’s been some kind of growth in productivity. Tech is making people more productive. However, you just don’t see that in the data.

GDP has increased 2.3% adjusted for inflation per year since 2010. But that’s in large part because the population is growing. So GDP per adult is just +1.6%. And it’s the adult population that’s growing. Essentially, it’s not newborns. It’s more adults. So GDP per adult has been growing 1.3%. And national income per adult—that’s the actual income that Americans get—is just +1.1% a year since 2010. That’s much less than before. 1980 to 2010, it was 1.4%—already a pretty bad growth number. And 1950 to 1980, it was 2% a year. So that’s interesting. There is a growth slowdown.

I’m sure you remember all the debates that happened when Robert Gordon, for instance, released his book on American growth—I think it was in 2016—predicting the slowdown of American growth. And so far, he seems to be correct. Again, productivity growth since 2010 has been sluggish, +1.1% if you look at GDP per hour worked, the standard measure of productivity. So that’s for the US.

But now what is really striking is you can compute the same numbers for Europe. And I did the math actually this morning, and here is what I found. GDP growth for Europe per year since 2010 has been 1.4%. So that’s less than the U.S.: 2.3 versus 1.4.

And so I think that the idea that there is this disconnect, this notion of “Europe lagging behind” comes from that. But now if you look at GDP per adult in Europe, it’s +1.1% as opposed to 1.3% in the US. So demography essentially explains almost all of the difference between Europe and the US. And then if you look at national income per adult, which I think is the most meaningful metric, it’s exactly the same number. It’s 1.1% a year in Europe, just like in the US, from 2010 to 2025. So income is growing at just exactly the same pace in Europe and the US. And so it’s just so different from anything you hear coming from either the Trump administration or conservative leaders in Europe that I think it’s quite astonishing, really.

Krugman: Yeah, there are a number of questions starting with data sources. I mean, not that any one of them is right, but if you use different sources, you get different results. I mean, readers may not know the Draghi Report, but Mario Draghi, the greatest central banker in history, somebody I greatly respect, he put out this big report which is very influential in European circles about the European productivity lag. And he found about a 10% faster productivity growth in the United States since 2000 in total productivity, which is not a huge amount per year, by the way. But it does get something there. But this is very much dependent on the data source. I know that there’s been some criticism of your stuff saying you were not using the same data source that everyone else is using. But if it hinges on that, it’s probably not something you should take too seriously.

Zucman: Yeah, I don’t dispute the idea that GDP per worker has been growing a bit faster in the US than in Europe over the last 15, 20, 25 years. I think that it’s there in the data. But first of all, the difference is really quite small. And second, why should we care so much about that? I think what we should care about is the income that people get. And with incomes in the US, you have to remember that there is something quite spectacular. How do you move from GDP to income? You know perfectly well but just to offer a refresher on national accounts statistics: GDP is the value of the stuff that’s produced in a given year in a country.

Krugman: Yeah.

Zucman: If you subtract capital depreciation, then you get net domestic product. That’s the true value of what you produce on net. And then if you add income received from abroad—net foreign income, interest and dividends received from abroad minus whatever the US pays to foreign countries—you get US national income. And net foreign income for the US used to be quite positive for a long time, and now it’s slightly negative. And that’s due to many reasons, but one of the main reason is the huge increase in the net debt of the US. Now the net foreign asset position of the US—meaning what the US owns in the rest of the world minus what the rest of the world owns in assets in the US, that has really collapsed to almost minus 100% of US GDP today.

It’s a dramatic evolution since 2010. The US used to have a positive net foreign asset position and now has pretty gigantic net debt vis-a-vis the rest of the world. And one implication that this has is that the US now is paying on net more income to other countries than what the rest of the world pays to the US. So when you look at the income that Americans actually get, national income, it’s actually exactly the same growth rate for Europe and the US since 2010. And that was not in the Draghi Report, which focuses on productivity, stuff that people produce. But I think it’s quite relevant, certainly, to think about the evolution of living standards in Europe versus the US. What matters at the end of the day is what people earn and what they can consume and save.

Krugman: An interesting point here is something I really learned from you. The U.S. continued to have a positive net income balance long after it had become a net debtor internationally, basically because foreigners earned a surprisingly low rate of return on investments in the United States. And there were all kinds of attempts to explain it. And finally, I think it was your work that said, well, what’s actually happening is it’s tax avoidance. It’s U.S. taking, or generally corporations making earnings in the United States artificially low by making them pop up in Ireland and other tax haven countries. And that makes it look like we’re paying very low rates of return on foreign investments in the United States and earning high rates of return abroad, but it’s actually just Apple and the pharma companies making their profits appear someplace else.

Zucman: Yeah. It’s really big. And a lot of it shows up in the very high rate of return that the US gets on its foreign investments. Super high rates of returns in Ireland, in offshore financial centers like that. And that’s really a reflection of profit shifting by multinational companies. They book a lot of income in those places to avoid the corporate income tax. And so it looks like they make super high returns.

For a long time, this was really big. It’s less big after the TCJA, which has reduced incentives to shift profits to tax havens.

Krugman: The TCJA is Trump’s first big tax cut from 2017.

Zucman: Yeah, it’s the first tax bill. It’s the first tax reform that got the corporate tax rate from 35% to 21% in 2018. And that introduced a number of incentives for multinational companies to book more profits in the US, intellectual property in particular. But what’s more important than that is, because the net foreign asset position of the US has been deteriorating so fast since 2010, now this net debt of the US is so large that finally the net income balance has turned negative. And so, yeah, when you take everything into account, the macroeconomic picture of the US, contrary to what you might hear from the Trump administration, is just not good. It’s really not significantly better in any measurable sense than in Europe.

By the way, it’s also bad in Europe. Basically, it’s equally bad. I’m not saying Europe is doing great. I think on some dimensions—on health care, on life expectancy, on carbon emissions, on leisure time, paid holidays, all of that—Europe is doing much better. But there are also major problems of, most importantly in my view, underinvestment in education, in higher education, in research, in technology, innovation. I think these are real problems that Draghi rightly pointed out in his report. But the solution to those problems is not just to deregulate everything. It’s just to invest in education and knowledge creation and infrastructure and so on.

Krugman: Yeah, and I would say physical infrastructure. I think education and all of that is probably ultimately much more important, but physical infrastructure in surprising places. I mean, it’s a real shock how bad the trains are in Germany. You know, it’s worse than in Britain, which is really hard to do.

Zucman: Yes, because there has been very significant underinvestment by the German government for many years. This is perhaps getting better finally because they changed their fiscal rules and now can have more deficits. Look, one really crazy number that is very worrying for a country like France is if you look at public spending on higher education and research per student adjusted for inflation, it has declined by 25% from 2012 to today. So France is massively under-investing its own future in its own education.

Krugman: I mean, if you viewed this as a zero-sum game between Europe and the United States, we may be taking care of that gap from our end by destroying our own educational and scientific base. And by the way, to the extent that U.S. growth has been powered by faster growth in the adult population, immigration policy is going to have a huge effect.

But you cited Robert Gordon. Tell me a bit about the Gordon hypothesis and how it contrasts with the sort of conventional wisdom out there.

Zucman: Yeah, the main hypothesis was that the big innovation waves belong to the past. You had electrification and mass sanitation, and it was kind of one-offs, and it’s not going to happen again in the future. And obviously, who knows? Maybe AI will turn out to be as important a revolution as those. Certainly we know that whatever has happened since 2010, tech has boomed. And when you look at market capitalization of tech companies, it’s really gigantic. And it seems that something really big is happening there. But it’s not possible to see that in the productivity numbers of the US as a whole. You can see that in the productivity numbers of California, which is doing very well. But if you look at the country as a whole, productivity growth is lower since 2010 than over 1980 to 2010, which was itself lower than 30 years before.

Krugman: Yeah. The best quote, I’m sorry to say, comes from Peter Thiel, who’s generally a loathsome character. “We were promised flying cars, and instead we got 140 characters.”
I mean, the numbers look like that. All of this very sexy stuff doesn’t really seem to move the bottom line on economic growth.

Zucman: Yeah, I guess not yet.

Krugman: People in economics mostly identify you with the inequality discourse. You’re kind of the heir to the Piketty project, I guess we could say, on inequality stuff. And I sit at the Stone Center for the Study of Socioeconomic Inequalityat the City University of New York, so let’s get into it. You have some really striking numbers that I’ve seen recently about concentration of wealth at the very top. Can you tell me what’s happening? And then talk about why it’s bad.

Zucman: Yeah, one area where there is tremendous growth, to be sure, is the wealth of the top billionaires in America. There are lots of ways to look at that. But one way that I find particularly interesting these days is to focus on the really narrow, very, very, top of the distribution, the top 0.0001%. Why? You might say it’s really a tiny number of individuals. That’s about 19 households today. It was four households in 1913. But this is where a lot of the action is taking place today.

Krugman: Okay.

Zucman: And also, if you look at this very narrow slice of the population, you can go back in time to 1850, essentially, because you had a number of rankings of the truly super rich back to the Gilded Age and even before. And so you can take a very long run perspective on the economic weight of the oligarchs. And the numbers are really quite crazy. And the statistic that I find most striking and relevant is the wealth of this group, the top 0.001% wealthiest people in the US. So, first of all, in the early 1980s, this ratio was about 0.3%. So the super-rich owed wealth the equivalent of 0.3% of the total income of all Americans. Today, it’s 10%, it’s 12%. So it has increased by a factor of almost 40. So what it means, essentially, is that if the 19 wealthiest people in the US spent all their wealth, they could buy the equivalent of 10% of the value of all the goods and services that are produced in a given year in the US. And of course, they don’t do that, right? They’re not spending down their wealth like that. But it’s just an illustration of the overwhelming economic power that they have and the power that they have to buy elections, to buy media, to buy influence, to buy competitors. And so that’s really quite striking.

And then what you can do with this type of time series is you can compare today’s situation to the Gilded Age. And in the Gilded Age, the number was 4%, meaning the very top [bracket] owned in wealth the equivalent of 4% of US national income. And so by that metric, this new Gilded Age is characterized by much stronger concentration at the top than the original Gilded Age, with a very fast pace of increase since 2010, and particularly fast over the last couple of years. And so I think it’s a good illustration of just the overwhelming economic and also political power that this tiny elite has acquired in America, which is truly unprecedented.

Krugman: Okay, this is a new perspective. First of all, when people say we’re in a new Gilded Age, they usually say it’s not as much as the original Gilded Age which was the absolute pinnacle of inequality. And what you’re saying is, by this measure of concentration of wealth in the hands of a handful of people, we’re actually well beyond the original Gilded Age.

Zucman: Well beyond.

Krugman: Obviously the political system was heavily corrupted by great wealth in the late 19th century, but they didn’t actually try to demolish democracy. Maybe in practice it wasn’t very democratic, but they didn’t actually go whole hog and just try to eliminate elections and all that. And so I’ve often wondered, why did the Gilded Age wealthy show more restraint than their modern counterparts? And part of the answer is maybe they just weren’t rich enough.

Zucman: That’s one hypothesis, a bit depressing, perhaps. Fundamentally, I’m quite optimistic about the power of democratic forces to prevail. And certainly, this happened already at the beginning of the 20th century. There was a whole antitrust movement. There was a creation, very importantly, of the federal estate tax, and then the federal progressive income tax. The US even had to change its constitution to create an income tax which then became extremely progressive with top marginal income tax rates above 90% in the middle of the 20th century. And that played an enormous role in curtailing that oligarchy. So democratic forces prevailed once. And I think I’m very optimistic that they will prevail again in the future, but we will need to invent new instruments. And the problem is much bigger in fact than during the original Gilded Age. I think we need much more focused and stronger action and we shouldn’t wait for too long.

Krugman: Okay, one thing I used to ask 10 years ago was, why in our great grandfathers or thereabouts generation it was sort of a standard part of political discourse to say that you want to limit the fortunes of the very rich not just for the sake of sharing the pie more equally or whatever, but also because of the political problem of concentrating great wealth. And even ten years ago that was verboten territory. In the United States you were not supposed to be anti-rich. You were just supposed to be concerned about economic payoffs. Sounding like Woodrow Wilson in the year 2015 was to be considered a dangerous, crazy radical. But there’s really been a sea change, in the discourse anyway. You’re part of it, but I do see a lot more people just saying that the problem with wealth is not just that it’s at the expense of other people, but that the wealthy have too much power.

Zucman: Yes, because everybody has experienced that. I think the most striking case, of course, is what has happened with Elon Musk. You remember the debates on the wealth tax in 2019, 2020 during the Democratic primary. One of the big arguments at the time against the creation of the federal wealth tax was this idea that wealth is virtual. Tesla at the time was not making any profit. So, supposedly, Elon Musk’s income was small. And so the idea was that, you know, you’re taxing something that just doesn’t exist. But then he woke up one day in 2021 or ‘22, I don’t remember. And he said, “Look, I want to buy Twitter.” And he very quickly found $44 billion to buy Twitter on a whim. And then he turned it into a machine to serve various political and ideological causes, including the reelection of Donald Trump. And then it brought him into Washington, DC with DOGE and so on.

And so everybody now understands what was long understood for centuries, very much including in the West, which is that extreme wealth is never virtual, it is always extreme power. It’s the power to influence policy, it’s the power to influence the prevailing ideology, the power to influence markets and so on. And so there is always a tension between an extreme concentration of wealth on the one hand and the very possibility of democracy on the other hand. And so now I think everybody, or almost everybody understands that. And it was long understood.

I mean, look. The US in many ways was founded in reaction against the oligarchy of aristocratic European countries of the 18th century. And then if you look at Franklin Roosevelt, for instance, he had a famous speech in 1942 where he goes to Congress and he says, “I think that no American should have an income after paying taxes of more than $25,000, which is the equivalent of like $2 million today. And therefore, he said, “I propose to create a top marginal income tax rate of 100% on all incomes above $25,000.” There was this understanding that the government should use policy and in particular tax policy to regulate inequality. It’s never been about raising revenue. Everyone understands that if you have a 100% tax rate, nobody’s going to earn more than $25,000. And so it’s not going to generate any tax revenue for the government. It’s really about regulating inequality, curbing excess wealth. And this long tradition, which was so powerful, so ingrained in the US, was forgotten for some time starting in the 1980s, but now I think it’s really making a comeback.

Krugman: There are some people I know who still think the biggest issue is limiting campaign contributions, but wealth makes its power felt in a lot more ways than just campaign contributions. I mean, right now, in addition to Muskovite Twitter, we have Larry Ellison trying to buy CNN, basically. And CBS is no longer the CBS we used to know. And this is extraordinary.

Zucman: And it can change so fast. Look at what happened in France, where France in many ways is sadly more advanced than the US down that road of oligarchic control of the media. 80% of the private press belongs to billionaires. There’s been massive investment. They’ve bought all the TV channels, everything that can be bought, essentially, in terms of media over the last few years. And now using it as a machine to fight any kind of policy, especially tax policy, that can do anything to make them pay a little bit of tax. To such an extent that France has very serious public finance problems, a public deficit of 5% of GDP per year, public debt of 120%, and is completely unable to pass any kind of legislation that would increase taxes paid by the super-rich by one cent. And so, you know, it’s in large part because of such tremendous control of the media and hence over the public conversation on these issues by the super-rich.

Krugman: Wow. I mean that was true in the Gilded Age as well, that the newspapers tended to be controlled by the super wealthy, but I think it’s a whole other level now. From the US perspective we tend to think of France as being high tax, high welfare, and that these things don’t happen in your country, but I guess they do.

Zucman: Yeah, things have changed in France in just five years when a number of billionaires said, now we are going to use our wealth to invest and to control the media. It can go really fast.

Krugman: Now, it’s interesting. I mean, New York City has a lot of billionaires. Probably more than all of France. But anyway, they couldn’t buy the mayoral election.

But you have a signature proposal out there now. It’s kind of like a wealth tax. But why don’t you describe the Zucman tax plan.

Zucman: Yeah, it’s a very simple but, I think, important idea, which is that extreme wealth has to come with uncompressible duties towards society. And so there has to be a minimum amount of personal tax that you have to pay each and every year if you’re extremely wealthy. And we can define, debate what it means. I’ve proposed $100 million as the threshold. So if you have more than $100 million, there is this minimum that applies to you.

And if you want the minimum tax to be effective, it has to be expressed not as a fraction of income, but as a fraction of wealth. Because the whole problem is that income for the super rich is not very well defined and it’s very easy to manipulate. Like, for instance, a few years ago, you had revelations by the US media ProPublica on the taxes paid by US billionaires. And in some years, you saw people like Jeff Bezos or Elon Musk reporting very little income and paying almost no or zero income tax, despite being super wealthy. And so if you want a binding floor and effective minimum tax, the minimum has to be expressed as a fraction of wealth. And so I proposed a minimum tax equal to 2% of wealth. Meaning, if you pay in income tax already the limit of 2% of your wealth or more, you’re not affected. But if you pay less, you would have to pay the difference to reach the minimum threshold of 2%. So it’s really not ambitious. It’s just a way to ensure that the super rich would pay as much in tax relative to their true economic income as other social groups.

It’s not ambitious because it’s a proposal that I developed originally when I worked a couple of years ago with the Brazilian government. In 2024, Brazil had the presidency of the G20 and they wanted to put new ideas on the agenda, new ideas for international tax cooperation. And I thought, look, there is a common minimum tax on big multinational companies. It’s imperfect and limited in many ways, but it exists since 2021. And so I think now we should try to do the same for the super rich, having a common minimum tax of the super rich. So I wrote this report to explain the proposal. And the idea was to put something on the table that would be meaningful in something like the G20, where you have different countries, very different situations.

And so, it’s not a tax revolution. It’s something everybody should be able to agree on. And it started the discussion. Then, of course, Trump was reelected, and so nothing can happen at G20. But it has started a conversation in many countries including in France, where this proposal was actually passed by the National Assembly in February last year, and that started kind of a huge debate about the merits and demerits of this type of minimum tax. It didn’t pass eventually in this budget. As I explained, there was really massive opposition by the super rich. But I think now the idea is there. It has overwhelming popular support. You’ve had various opinion polls that show like 86% of voters supporting this measure, including like 85% of right-wing voters. And given the very grave, dangerous budget situation of France, I think eventually it has a good chance of being passed.

Krugman: That’s interesting.

Zucman: The enormous increase in the wealth of billionaires is a global phenomenon, not just in the US, but everywhere, very much including in France. The flip side is that there is a lot of tax revenue to be collected by taxing them, even at 2%. So for France, this minimum tax would generate 0.8% of GDP in tax revenue, which of course is not enough to close the 5% of GDP deficit. But we’re talking about taxing very few individuals. It’s a very significant part of the equation. And also, it’s going to be very hard to ask other people to pay more tax, as long as the truly super rich refuse to contribute a bit more.

Krugman: Okay, but there’s always the question of the super rich establishing residency outside. So this was supposed to be a kind of G20, or basically major economies thing. Couldn’t people just establish residence in Doha or something?

Zucman: Yeah, I mean, that’s really the main question in all of this. And this problem has a solution. The solution is that the tax should keep applying to billionaires even after they’ve moved out of the country, for at least a number of years—five, maybe 10 years, we can discuss that.

Look at what the US does. The US has taxation that’s based on citizenship, meaning if you’re a US citizen and you move to the Cayman Islands, you still have to pay taxes in the US until you die, unless you renounce US citizenship, which is very rare. You also have a tax at the time of citizenship renunciation. So that’s extreme in some ways. But what other countries do is the opposite extreme, meaning if you become a billionaire in France and now you move to Switzerland, then immediately France stops taxing you. And what I propose is to do something that’s kind of in between the US system and the French system, meaning French taxes would follow you and continue to apply for five or 10 or 15 years so that this threat and this risk of out migration by the super rich will be considerably reduced.

Krugman: So my concern actually comes to some extent from the other side, which is, is this enough to really put a dent in oligarchy? My guess is really not.

Zucman: Oh, no, you’re right. It’s not enough. It’s really not enough. The arithmetic is quite simple. Billionaire wealth has been growing 10% a year on average over the last four decades. Average wealth, whether in France or in the US, has been growing by 4% a year. So there is a six points differential. So if you want to only stabilize wealth inequality, if past trends continue, you need roughly a 6% wealth tax. If you want to reduce wealth concentration, you need more than 6%. So to be very clear, with 2%, it’s not that you would reduce wealth concentration. Wealth inequality would keep rising, but at a slightly slower pace than business as usual. So it’s clearly far from enough. However, history shows that what’s most difficult is to move from zero to something positive, right? And once you have something positive, even if it’s 2%, then it opens up a realm of possibilities.

Krugman: Of course, this means that the billionaires, they understand this too, and they will go hysterical because they know that it’s just the beginning. As my old teacher Charlie Kindleberger used to say, it’s the first bite of the cherry, right? Once you start…

But you’re optimistic that this could actually happen in France.

Zucman: Yes. I’m very optimistic. I don’t know if it’s going to happen first in France or perhaps in the UK or in Brazil. I mean, there are different countries where this is being discussed at the moment. Like, for instance, in the UK, you have the leader of the Green Party, Zach Polanski, who’s doing pretty well in the polls, and he’s campaigning on very similar ideas. In Brazil, Lula was the one who put this idea on the agenda of the G20, so he’s very committed to that. And what I think is really interesting is what’s happening, or hopefully is going to happen in California because there is an initiative to put a billionaire tax on the ballot in November. It’s not exactly this 2% minimum tax. It’s a one time tax of 5% on the wealth of Californian billionaires. It’s a one-off because in the US state context, there would be real risks of rich people moving to another state if California had an annual wealth tax. But if it’s a one-off, that’s not a concern because billionaires would have to pay it if they are resident in California as of January 1st of 2026. So it’s actually too late to avoid the tax by moving to Texas or what have you. And so we don’t know yet for sure whether it will be on the ballot. It needs to collect 800,000 signatures. And then there’s going to be a very fierce campaign. The polling that was done is very good, but I anticipate, and we’re already seeing it, a lot of opposition from the California billionaires. But at that stage, talking in January 2026, I would say that California is best positioned actually to be the first state to have a tax on billionaires.

Krugman: New York City would be a little problematic, I think. Although, again, if it’s retroactive the way the California thing is, then New York could do that as well. Otherwise, it’s one thing if people have to move to another country. It’s another if they just have to move to New Jersey.

Your numbers on wealth concentration are really alarming but you said you’re kind of optimistic about us finally getting this under control.

Zucman: I’m optimistic because again, look at opinion polls. These types of measures are overwhelmingly popular, even among Republican voters actually. What’s been lacking is some champions for these ideas in the political sphere. And look, there are some champions—Bernie Sanders, for one, and Mamdani. But in California, for instance, Newsom is very much against the tiny one-off 5% tax on their wealth. And so that’s kind of the problem at the moment. But given the numbers that we see in the polls, the truly overwhelming support, the very strong anti-oligarchy current in American society, it’s a real thing. We’ve seen the various rallies that Bernie Sanders has organized after the reelection of Trump all across the country with tens of thousands of people showing up everywhere in the US to protest against the oligarchy drift. It corresponds to a reality in the US that people resent this far too extreme concentration of wealth. And so I think at the end of the day, and I hope it’s not going to take too long, but I think democratic forces will end up prevailing.

Krugman: Okay, that’s an upbeat note on which to conclude this conversation. Thanks so much for talking to me.

Zucman: Thank you so much.