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by LaurensBER 4 days ago
> Europe’s Ultra-Rich Could Fund a Substantial Part of the EU’s Budget

> Taxes on wealth, crypto and financial trades could raise billions no single member state can collect alone.

The sad reality is that as soon as the EU introduces this, these families won't be Europe's Ultra Rich anymore. They'll soon be the UK/Swiss/Dubai/Israel/US Ultra Rich.

What the EU needs is:

- Less bureaucracy

- One capital market

- More venture capital

What the EU doesn't need is a larger budget. Is is really an issue if a family has a net worth north of 100 million if 90% of that is invested (directly or indirectly) in future growth of the EU?

> A financial transaction tax would not only generate additional revenue for the EU budget; it would also make short-term and speculative trading in financial markets more expensive.

This goes *directly* against the https://en.wikipedia.org/wiki/Efficient-market_hypothesis. Potentially creating more friction and less efficient capital allocation in an continent already struggling with growth and innovation.

> A tax on ultra-high wealth would have particularly high revenue potential. One possible approach would be a minimum tax for individuals with net wealth exceeding €100 million, ensuring that the taxes paid annually by this group amount to at least a specified proportion of their wealth. Such a tax would specifically target individuals whose effective tax burden is lower than that of other groups. At the same time, it could help to limit tax competition between member states for particularly wealthy residents.

The biggest competition does not from member states, rather it comes from Switzerland and the United Kingdom. Two countries where citizenship is (for most ultra-rich) a plane ride and a few administrative meetings away. USA, the middle-east and Israel offer other options, slightly further away.

3 comments

> The sad reality is that as soon as the EU introduces this, these families won't be Europe's Ultra Rich anymore. They'll soon be the UK/Swiss/Dubai/Israel/US Ultra Rich.

Yeah, but the physical assets they own can’t move freely. The EU can still tax or seize assets within the EU.

> Yeah, but the physical assets they own can’t move freely. The EU can still tax or seize assets within the EU.

This is true but effectively it would lower the value of those assets (since any future investor needs to account for the increased tax burden) which would also be negative for the EU.

OK, and then what happens when the money runs out? EU bureaucrats might be able to seize existing wealth but they don't know how to set policies that create new wealth. Rather the opposite.
Pretty sure Israel has even higher taxes. The people who live there don’t live there because of the tax situation, they live there because they are Jewish. You really can’t offset that with a revised tax code.
I'm not a tax expert but it's my understanding that Israel doesn't have an inheritance or wealth tax which is already better than a lot of European nations.
In general more integrated EU with easier flow of capital and easier investments…

https://news.ycombinator.com/item?id=49075517