A new G20 report led by Nobel laureate Joseph Stiglitz has delivered an unmistakable warning about the scale of global inequality. Over the past two decades, the richest 1 percent captured 41 percent of all newly created wealth, while the bottom half of humanity received barely 1 percent. On average, the wealthiest gained 1.3 million US dollars, while the poorest gained only 585 dollars (in constant 2024 dollars). And the picture is set to worsen. In the next decade alone, 70 trillion dollars is expected to be passed on to heirs, threatening to lock in inequality for generations.
These findings echo a growing body of international research showing that inequalities today are not only extreme but also structurally embedded. Recent work by the World Inequality Lab, which draws on the contributions of hundreds of researchers worldwide, points to several converging trends: wealth is concentrating at the very top, democratic institutions are weakening under the pressure of private influence, and the global financial architecture amplifies rather than corrects disparities between and within countries.
One conclusion stands out: inequality has become a systemic risk to democracy, to climate action and to social stability
Why this matters for democracy, climate and fairness
Extreme wealth concentration is not only an economic injustice. It democratic governance, social cohesion, and the global commons. A privileged few accumulate vast means to influence legislation and public debate and skew markets in their favour. Without change, the world risks drifting toward a hereditary oligarchy, where opportunity, power and influence are inherited, not earned.
Yet, momentum for transformation is growing. One promising avenue is the negotiations on a UN Framework Convention on International Tax Cooperation, scheduled from 2025 to 2027. This process could finally rebalance a global tax system that currently favour the wealthy and powerful. Key issues under the table include fairer allocation of taxing rights; reform of the failed “arm’s-length principle”, the rule requiring multinationals to price transactions between their own subsidiaries as if they were independent firms, a system that has been widely gamed to shift profits into tax havens; and the replacement of bilateral tax treaties with rules that reflect 21st-century inequality and wealth concentration.
The problem is real and it is European too
Inequality is not only a global issue. It’s very much a European reality. The EU is increasingly defined by extremes: nearly 500 billionaires (39 more than last year), while the richest 3,600 Europeans, just the top 0.001%, now own as much wealth as 181 million Europeans (the bottom 50%). Eight out of every 10 euros in EU tax revenue come overwhelmingly from ordinary people.
The extreme concentration of wealth, which is reinforced by structures that allow the richest to minimise their tax contributions, drives unproductive rent-seeking, distorts political decision-making, weakens social cohesion and ultimately deepens inequality. Such imbalances also reduce economic resilience and widen the gap between those who can shape policy and those who must live with its consequences.
Inequality fuels carbon pollution and blocks climate justice
The inequality crisis and the climate crisis are deeply linked. The richest Europeans carry a disproportionately large carbon footprint. Data from a recent Oxfam report show that the top 10% of Europeans produce as much carbon as the bottom 50% combined. Meanwhile, emissions from the bottom half have dropped, but those of the richest 0.1% have risen sharply.
If the EU is serious about limiting global heating to 1.5 °C, it must ensure that emissions reductions are equitable and that those with the greatest responsibility and capacity pay more. But this will not happen without fair taxation of extreme wealth.
How the wealthy avoid paying — and why that must change
Too often, the ultra-rich make use of legal loopholes that allow them to minimise or delay paying taxes, such as parking assets in low-tax holding structures, retaining profits instead of distributing them, and relying on complex inheritance arrangements to avoid meaningful contribution. In the last six months alone, EU billionaires have seen their wealth grow by €405 billion more than €2 billion a day.
That growth didn’t come from productivity or public benefit. It came from a system that privileges the rich. Such unchecked accumulation is not an accident — it is the outcome of policy choices that Europe has the power to reverse.
A roadmap for justice: What Europe should do now
Some EU leaders are already debating wealth taxation, such as, for example, during today’s FISC committee hearing on taxing the ultra-wealthy individuals. But debate must become concrete action. Europe needs a clear, coordinated roadmap for fair, effective and transparent taxation of extreme wealth.
At the EU level, this includes ending preferential treatment for the richest households, strengthening data collection and transparency of asset ownership, and ensuring fairer taxation of capital and wealth.
In the 2026 tax package, the EU should establish a European register of land and real estate, require self-reporting for individuals with more than 100 million US dollars in assets, and harmonise exit taxes to prevent avoidance through relocation.
At the national level, governments should raise taxes on the income and wealth of the richest 1 percent, while supporting EU-wide reform rather than hiding behind tax sovereignty.
At a global level, Europe should champion the UN tax convention and join the Sevilla Platform for Action on taxing the super-rich.
A just transition needs fair taxes and not austerity
Europe repeatedly faces crises — climate breakdown, inequality, social hardship — and each time, citizens pay the price. But austerity is a political choice, not an inevitability. By demanding fair taxation of extreme wealth, Europe can generate the resources needed for public services, climate mitigation, social protection, and democratic renewal.
The choice remains stark but simple: accept rising inequality, democratic erosion and ecological instability, or act deliberately to reverse them.
