AI and Jobs - Part VII - Wealth Taxes, Inheritance Taxes and Automation Taxes - Billionaire Class 3, 2026

-Image by Copilot

 Welcome Back, Class!

This will be our last class for the time being because I have to do my own taxes -yes, really, so let’s dive straight into Wealth Taxes.

Why Do we need Wealth Taxes? Anyone?

Yes, Larry that’s half right, because wages are taxed, while wealth is barely touched at all  and a lot of people are being paid with shares and stock options to reduce the amount of income tax they have to pay. In addition, if you look at the table below, you can see that’s where the wealth has been accumulating and compounding, while the tax base of governments has been progressively shrinking. There's very little fat left to trim without causing more suffering or costing more not only in social harm, but economically in say, damaged roads and poorly functioning services, extra law enforcement and so on. 

A lot of investment has also gone into other assets such as property and luxury goods such as yachts and private planes which have only attracted taxes when sold, while appreciating a great deal. Largely because of the conversion of income to shares, the wealth  of 26 of America's top billionaires increased by almost $500 billion between 2013 and 2018, yet they paid only an average of 4.8% on their declared income and those figures are almost certainly even more skewed in their favour now.  You can see more detail here. 

Declared Income, Wealth Growth and Taxes for US Billionaires 2013 -2018 

Billionaire	Reported Income 2013–2018 ($M)	Tax Paid 2013–2018 ($M)	Rate on Reported Income	Wealth Growth 2013–2018 ($M)	"True Tax Rate" (on Wealth Growth)
26 Billionaires' Totals	$132,209	$24,000	18.2%	$499,600	4.8%
Jeff Bezos	$4,992	$1,158	23.2%	$105,800	1.1%
Mark Zuckerberg	$3,912	$536	13.7%	$49,000	1.1%
Bill Gates	$17,100	$3,146	18.4%	$29,500	10.7%
Michael Bloomberg	$12,300	$504	4.1%	$28,500	1.8%
Larry Page	$5,940	$784	13.2%	$27,800	2.8%
Sergey Brin	$6,240	$1,067	17.1%	$27,000	4.0%
Steve Ballmer	$6,300	$888	14.1%	$26,000	3.4%
Warren Buffett *	$125	$24	19.0%	$24,300	0.1%
Elon Musk	$1,524	$411	27.0%	$19,600	2.1%
Larry Ellison	$6,420	$1,400	21.8%	$19,500	7.2%
Rob Walton	$3,942	$812	20.6%	$18,200	4.5%
Alice Walton	$4,362	$794	18.2%	$18,100	4.4%
Jim Walton	$2,394	$462	19.3%	$17,900	2.6%
Charles Koch	$1,278	$211	16.5%	$16,500	1.3%
David Koch	$1,404	$239	17.0%	$16,500	1.4%
Sheldon Adelson	$2,622	$490	18.7%	$8,600	5.7%
Laurene Powell-Jobs	$9,420	$1,394	14.8%	$7,900	17.6%
Ken Griffin	$10,080	$2,943	29.2%	$7,600	38.7%
Stephen Schwarzman	$4,692	$1,046	22.3%	$6,700	15.6%
Stan Kroenke & Ann Walton Kroenke	$786	$110	14.0%	$5,700	1.9%
Israel Englander	$5,016	$1,545	30.8%	$3,400	45.4%
Jan Koum *	$11,580	$2,270	19.6%	$8,600	26.4%
Pierre Omidyar	$5,196	$883	17.0%	$2,700	32.7%
Leon Black	$1,440	$284	19.7%	$2,100	13.5%
George Roberts	$1,740	$355	20.4%	$1,400	25.4%
David Bonderman	$1,404	$268	19.1%	$700	38.3%

* 2013 data is not available for Warren Buffett or Jan Koum, who became a billionaire in 2014. For Koum, 2013 starting wealth is calculated at $1 billion, though it was likely less since he did not make the Forbes billionaires list that year.
Source: Americans for Tax Fairness analysis of ProPublica IRS data (April 2022) and Forbes annual billionaires reports, covering 2013–2018. 4taxfairness.substack.com

Equality Trust's charts for the UK show not only how wealth has exploded exponentially at the top, but also that the majority of it has come from financial dealings, property and inheritance rather than from more productive activities such as industry, retailing and even tech.

French economist, Gabriel Zucman’s 2024 report for the G20, found that the world’s billionaires currently pay the equivalent of just 0.3% of their wealth in tax, and a 2% minimum would raise $200–250 billion a year from about 3,000 people worldwide. Billionaires now own the equivalent of 13% of world GDP, up from just 3% in 1987.

Countries which already have Wealth Taxes

The Tax Foundation notes that eight countries currently have wealth taxes – Norway, Spain, Switzerland and the Netherlands in Europe and several Latin American countries, though amounts vary as does the way in which they are applied. Spain for example, has a progressive tax of 0.2–3.5% on net wealth above €700,000 ($US 2.2 million) plus a solidarity tax on €3M+) with regional variations. Norway which has had a wealth tax since 1892,  has .0% on wealth NOK 1.9M–21.5M of 1% above NOK 21.5M ($US ) and on stocks exceeding NOK 1.9 million ($US 198,9961). Switzerland charges an annual wealth tax  on worldwide assets – excluding property, by canton at 0.1–1%.

There are other variations too. France, after abolishing its wealth tax in 2018, now levies taxes on property worldwide above EUR 1.3 million (USD 1.5 million) as well as non-French tax residents whose net real estate assets located in France. It also taxes luxury goods. Belgium has a tax on securities valued above 0.15 percent with an average value of EUR 1 million (USD 1.15 million), since 2021.  

The Netherlands has had the value of net wealth, excluding primary residence and substantial interests in companies as part of its income tax system, but this is currently being revised. For 2026, the weighted average yield over all categories will be applied to the total assets above a personal exemption of EUR 59,357 (USD 68,373) which will attract a flat tax of 36% 

Italy has a flat entry tax on wealth which gives fifteen years of tax-free status. Initially ,this began with a €100,000 on foreign assets once a person became a resident but has since risen to €300,000. However, it also has separate taxes on crypto currencies. A 0.2% annual wealth tax specifically on cryptocurrency holdings, based on the value held as of 31 December. It's separate from Italy's regular capital gains tax on crypto, which jumped to 33% in 2026. 

The wealth tax applies to foreign-held or self-custodied crypto (a resident holding €100,000 in foreign-held crypto at year-end owes €200 — 0.2% × €100,000, regardless of whether it was ever sold), while crypto held with an Italian-based exchange instead attracts a 0.2% stamp duty, automatically withheld by the exchange. Either way it lands at the same 0.2% rate. Other countries such as Spain, Switzerland and the Netherlands simply include crypto holdings in to general wealth taxes. The table below is a broad summary only and does not include the latest changes with respect to France.  

 Comparison of Different Types of Wealth Taxes 

Country/Region	Tax Type	Rate	Exemptions	Revenue Use	Capital Flight?
Switzerland	Annual net wealth tax	0.3%–1%	Primary residence, business assets	Local public services	Low
Norway	One-time net wealth tax	1% (individuals), 0.8% (couples)	None (broad base)	Pensions, infrastructure	Low
France	Annual wealth tax (IFI)	0.5%–1.5%	Financial assets excluded (real estate only)	Social programs	High (pre-reform)
Spain	Annual wealth tax	0.2%–3.75%	Varies by region	Regional budgets	Moderate
Netherlands	Flat wealth tax (Box 3)	36% on deemed return	First €59,357 of assets	General budget	Low

Table created by Claude (Anthropic), based on data from the Tax Foundation's "Wealth Taxes in Europe," 2026.

Although the conservative/libertarian leaning think tank, The Tax Foundation, naturally opposes wealth taxes, Zucman says, we need to tax billionaires because there is no reason why billionaires should be taxed less than working people. Vive La Liberté, Égalité and Fraternité! He proposes a 2% tax on every individual whose net worth exceeds €100m. Applied globally to its 3000 billionaires, this would raise $250 billion. And no, it won't kill innovation. See Sweden or for that matter, South Korea which is now in 4th place. Click here if you weren't paying attention in that class. 

This is not a fringe idea. A universal wealth tax like the 15% Company Tax, has already gone to the G20 and prompted a parliamentary vote in France, and a coordinated minimum-tax blueprint has since been published through the EU Tax Observatory. France's own version — a 2% minimum tax on wealth above €100 million — was adopted by the National Assembly in February 2025, affecting roughly 1,800 households.

California now wants to introduce a one-time 5% wealth tax —Proposition 40, on assets worth more than $US1 billion to meet a shortfall on its healthcare program. This has sparked a flurry of outrage, particularly from its wealthy tech. billionaires like you Sergey, Larry, and Travis who’ve been eyeing off real estate in Nevada and Delaware.  I understand you, Sergey have spent more than $102 million opposing this tax and at least some of you have either threatened to relocate to lower-taxing regions or already done so.

“We’ll Leave if you Tax Us!”

Yes, some millionaires and billionaires do leave. France lost a few when it tried to introduce a full wealth tax. Norway lost a few when it upped its take slightly and a few left the UK when it began to tax the income of non-domiciled residents. While these get a lot of press - don’t they Sergey and Larry, the remarkable thing is how few in fact do leave.

• Research based on administrative data from Sweden and Denmark shows that while some billionaires did leave in response to a 1% tax increase, 98% of them stayed and, while the impact of their departure on the economy was minimal, the fortunes of their companies declined.
• A UK study also found that although some 2% of 'high wealth individuals' did leave following changes to the tax system, it did not differ significantly from the normal comings and goings of the ultra-rich. Even taking the disputed figures at face value (16,500 expected to leave in 2025), that's under 1% of the UK's roughly 3 million-plus millionaire population, and had more to do with uncertainty and other changes such as the ending of tax exemptions on non-UK earnings for non-residents and the introduction of inheritance taxes, not wealth taxes per se.
• Those results are borne out elsewhere as well. Although around 800 millionaires reportedly left France in 2025, it means that 2,400,000 remained (making only 0.03% who left), though leavers took an estimated €5 million each with them in personal assets, making a total of around €4 billion. Furthermore, not everyone agrees the exodus was driven mainly by tax.

France's political instability – four prime ministers in twelve months and the prospect of a Le Pen presidency in 2027, are also cited as major factors, with economist Thomas Piketty arguing that fears of capital flight from wealth taxes are often overstated. The French model, which has been on-again and off – again since 1982, was replaced in 2018 with one which targets tangible assets such as property and luxury items such as yachts and sports cars, not shares.

Who's Staying?

Interestingly, Nvidia's Jensen Huang has publicly said he's happy to pay his estimated $US 8 billion share. And by far the majority of Norway’s or the UK’s have not left. For them, home is more than just a place to escape taxes.  I imagine it’s no use trying to appeal to your consciences when we see the condition of Amazon workers in your facilities Jeff, or when we hear that people who do the grunt work in Silicon Valley must ride the buses all night, because your presence has pushed up the cost of housing so much, that they can’t afford to rent anything near their work. 

Travis, when you were CEO of Uber it wasn’t as if you created work where there was none. It largely displaced existing, often unionised and protected taxi jobs with less secure, benefit-free contractor work. 

And you Peter, seem to have gone right over to the dark side, knowing the uses to which your platform is being put both at home and abroad.  

I personally would not want to swap the buzz, creativity and diversity of San Francisco for a Delaware or even Nevada, just to save a few tax dollars. What would be the point of being rich? Especially when you can make that money back in the blink of an eye, without even having to lift a finger. Someday we must talk about hollowed out communities, 'hungry ghosts' and tax flight refugees.

Exit Taxes

For those not blessed with Huang’s loyalty and in the absence of a universal wealth tax, Zucman recommends exit taxes to discourage capital flight. Exit taxes are already standard practice in a third of the EU and are Norway's direct response to the sort of capital-flight which threatens California — but California itself sidesteps the need for one entirely through its residency-snapshot design, which is arguably a more elegant solution than an exit tax would have been. If California’s Proposition 40 passes, you will still be required to pay if you lived there on January 1, 2026.

According to the UK’s Wealth Tax Commission Report countries with strong third-party reporting see very little avoidance. Studies of Sweden and Denmark — both with systematic third-party wealth reporting — found a 1% wealth tax reduced reported wealth by less than 1%. Other measures include having information sharing arrangements and strong enforcement, a centralised tax design to avoid the kind of wealth-shifting which is occurring in between regions in Switzerland and the USA, having a broad-based tax mix which reduces incentives to manipulate income or switching between assets to reduce tax liability. I would also add, given the French situation, the need for consistency and stability.  

There are other ways by which the wealthy minimise their taxes. One is through the use of trusts and the  other is to simply pass assets on to their heirs.  

Inheritance Taxes, Trusts, GRATs,

Another favoured tactic for reducing one's tax liability is by creating family trusts which spread earnings amongst non-earning family members, especially children, non-working spouses and the like. 

In the Equality Trust ‘s UK table, "Proportion of Billionaires by Source" we see that from the early 2000s, wealth from Property and Inheritance has even overtaken shareholdings and all other categories. Obviously if you have money, you are better able to take advantage of opportunities such as depressed house prices or shares, or low interest rates on borrowings and expensive lawyers and tax consultants, not generally available to the average worker struggling to survive day-to-day. 

 Inheritance Taxes by Country

Country	Rate	Notes
Japan	Up to 55%	Highest in the world
Belgium (Wallonia)	Up to 80%	For unrelated heirs — the world's steepest for non-relatives
France	45% direct line, up to 60% for non-relatives	Rate depends heavily on relationship to the deceased
South Korea	Up to 50%	Among the highest globally
Germany	7%–50%	Sharply tiered by relationship to the deceased
UK	Flat 40% above £325,000	Raises roughly £7 billion a year
USA	Federal estate tax, 40%	Only above $15 million per individual (2026) — barely touches ordinary families

Sweden and Austria abolished their inheritance taxes in 2004 and 2008 respectively.  Australia abolished its own in 1979 under pressure from wealthy estates and small businesses. Canada never really had one and both now tax capital gains on sales of assets at death instead, with Australia switching to that model in 1985.

While many Australian trusts such as charitable trusts, property trusts held in common by many, a fixed trust for say, a disabled person, remain exempt from taxes, discretionary trusts, which are especially about tax avoidance, have been flagged for more attention in the recent budget.   
The  UK’s inheritance tax and US estate tax still exist, but are riddled with tax avoidance mechanisms such as trusts and GRATs.

GRATS  (Grantor Retained Annuity Trusts) are a peculiarly American tool used by the extremely wealthy to pass on appreciating assets such as stocks, virtually tax-free. The grantor puts assets into the trust for a set term and takes back annuity payments roughly equal to the original value. If those assets grow faster than a modest IRS-set benchmark rate, all the extra growth passes to heirs at the end of the term with little or no gift or estate tax owed. Efforts are underway to close that loophole, but it hasn't happened yet. continues unchecked.

Capturing the Flow of Wealth

These days a great deal of capital moves as purely financial transactions –via electronic currency,  algorithmic trading and more recently AI assisted applications and involves very little visible income, labour or goods at all, which also means less payroll taxes. As early as 1972,  Yale economist and Nobel laureate, James Tobin, proposed a tax on currency movements (a Tobin Tax) in order to slow speculation on currency fluctuations and produce less volatility in financial markets. 

Since then, more than 30 countries have adopted some type of financial transaction tax to capture some of this electronic traffic including the UK, France, Italy, South Africa, Switzerland, Hong Kong, Singapore, and India. France raised its rate from 0.3% to 0.4% in 2025, and Italy doubled its cash-equity rate from January 2026. However, a European -wide version which would have prevented jumping to lower-tax jurisdictions, has effectively been abandoned.  

While wealth taxes would go some way to redressing the imbalance created by previous tax cuts, we still need to consider how to cover the present and future unemployment being created by AI adoption itself. 

Automation Taxes [Drum Roll, please!]

The last way – for now, in which funds could be raised – certainly for retraining of workers displaced by AI, is to introduce an Automation Tax for each employee who loses his or her job due to AI, as Bill Gates suggested way back in 2017.  

AI was cited as a factor in nearly 54,836 US layoffs in 2025, and MIT found AI can already perform roughly 11.7% of the US labour market, worth up to $1.2 trillion in wages across finance, healthcare, and professional services. Many believe that the  losses will be much higher than previously thought.

Since payroll taxes and all kinds of indirect taxes on workers make up a large chunk of government revenues, it means they will be further starved of funds for essential services including things like additional unemployment support and retraining. 

So far, only South Korea has made a move in that direction, not so much by instituting a tax, but by reducing tax deductions for automation. For large companies credit fell from 3% to 1%, for mid-size companies it fell from 5% to 3% and small firms kept 7%. Research found this reform led to decreased automation investment, increased employment, and reduced wage inequality. 

In "Should Robots Pay Taxes" Abbot and Bogenschneider writing in the Harvard Law and Policy Review, argue that removing subsidies for AI uptake would at least reduce the outright economic advantage of replacing humans with AI. [This article is well worth a read if you can get hold of it. It also points out another problem with IT generally and AI uptake in particular - namely that when Detroit was in full swing in the 1990s, the three major car makers had a combined total stock market value of $36 billion and employed 1.2 million workers, whereas Silicon Valley, with a stock market value of $1.9 trillion in 2014, employed a mere 137,000, and that even if some new jobs materialise, we can expect "large -scale permanent increases in unemployment"].  

Other ways which have been considered by various commentators include: - passing the costs on to users via higher charges for the tokens used by AI, on each thousand words of text used or image produced, or on robot services - an approach much favoured by the Brookings Institute, so as not to hinder capital investment or slow adoption. Broadening the tax base to include Consumption Taxes on other things like streaming services and cloud services, is another recommendation, but as we've seen in discussing other types of taxes, these would not only be regressive - in other words, would harm some sectors of the community and the economy by either limiting access, or taking spending power away from other areas, including the rollout of AI itself. Robots are not big spenders either.

A 2026 University of Pennsylvania/Boston University study found firms were already locked into an 'AI arms race' to remain competitive, even if mass layoffs threaten to destroy consumer demand for their output and that of everything tried, only a direct automation tax actually breaks the cycle. Abbott and Bogenschneider therefore propose a tax on the gross profits of AI companies and AI enhanced products such as robots - on gross earnings, to prevent the kinds of profit-shifting we have noted elsewhere. There are various permutations on this theme, too complex to follow up here, but vital for policy makers. International agreement will be needed to prevent the kind of race-to-the-bottom tax and concession shopping we have seen already.

Oh dear Class. Here we are —out of time again! We won't even have time for our test. I am going to have to set you some homework. What about on the topic of "How I would like to be remembered on my tombstone" or perhaps, "Why one person needs four yachts," or, given your recent payrise Elon, "What I would do if I found $158 billion* in my paypacket." 

Thank you to my faithful AIs - Copilot for the image, Claude for the Tables, lots of research and long discussions and to Ecosia and ChatGPT for helping out as necessary. Although no librarians were badgered for this post - it would have taken a year to do it the traditional way, I promise to do so very soon. 

* Given our recent discussion re CEO pay, Elon Musk's salary has just gone to 2,522,203 times the average Tesla workers pay. Excluding his pay CEO remuneration for Fortune 500 Companies for 2025, have risen from $8.9 billion in 2024 to $22.8 million taking a ratio of  CEO to average workers' earnings from 285:1 to 321.1. 

Stoppress: In late-breaking news, August 14, 2026, South Korea has just moved from indirect (tax credit) to genuine direct headcount-linked levy, which would charge employers when AI related layoffs happen.