A proposed 2% global tax on billionaire wealth would eliminate an average of 2 million jobs annually and reduce global GDP by $80 billion per year over the first decade, according to a new macroeconomic analysis released by QUEST at EY on behalf of the Tholos Foundation and Americans for Tax Reform. The study examines a coordinated minimum tax on ultra-high-net-worth individuals proposed by economist Gabriel Zucman and commissioned by the G20, concluding it would inflict significant and sustained damage on the global economy, workers, and investment.
The research projects the economic harm would worsen after the initial ten-year period, with annual GDP losses climbing to $120 billion per year. Global labor income would fall by an average of $10 billion annually during the first decade, then drop by $50 billion per year in subsequent years. Over the first ten years alone, the cumulative impact would reach roughly $800 billion in lost GDP and $100 billion in reduced labor income, with 20 million total job losses measured as the sum of annual employment reductions. All figures are calculated relative to the size of the 2025 global economy.
The study explains that taxing billionaire wealth at 2% would raise the effective tax rate on capital held by billionaires, increasing the user cost of capital for billionaire-owned assets and lowering the after-tax return on investment. According to the report, "A higher cost of capital discourages new investment and slows capital accumulation, reducing the capital stock available to workers over time." Lower capital per worker decreases labor productivity, which then reduces wages and employment—effects that compound over time as reduced investment leads to persistently lower capital stocks. The authors note that real-world tax avoidance, incomplete international coordination, and enforcement challenges would complicate any wealth tax, with some wealth potentially moved into unproductive storage rather than invested in the economy. Forbes data cited in the study shows 45% of global billionaire wealth is headquartered in the United States, with the next largest share of 12% in China, followed by single-digit percentages in countries including India, Germany, Russia, and the UK.
The organizations behind the study urge policymakers worldwide to reject the Zucman proposal and similar schemes, arguing that economic growth—not redistribution through higher taxes on investment—is the only reliable path to raising living standards. Grover Norquist, president of Americans for Tax Reform, said wealth "isn't stashed under giant pillows" but rather consists of "factories, steel mills, trucks, warehouses, office buildings, scientific research," adding that "you cannot tax capital without taxing the people who work with that capital." Christopher Butler, executive director of the Tholos Foundation, noted that wealth taxes have failed repeatedly in OECD countries because capital is mobile and hard to value, arguing the solution is "more billionaires not kneecapping successful entrepreneurs." The report's bottom line is clear: taxing billionaire wealth means less capital available for workers, and that translates directly into fewer jobs and lower wages for ordinary people.