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View all search resultsWill democracy govern capitalism, or be consumed by it?
Taxing extreme wealth is not only necessary to prevent 21st-century Caesarism but also essential to saving democracy.
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Posters promoting an initiative to tax the superrich to help finance Switzerland’s global warming policies line a street in Geneva on Nov. 25, 2025, ahead of a referendum on Nov. 30. (AFP/Fabrice Coffrini)
O
ngoing efforts to derail multilateral tax cooperation lay at the heart of a global program to replace democratic governance with coercive rule by the extremely wealthy, or what we call 21st-century Caesarism. Any strategy to counter this program, therefore, must recognize that taxing extreme wealth is essential to saving democracy.
Fortunately, there has been some progress here. The African Union continues to champion the United Nations Framework Convention on International Tax Cooperation; Colombia, Brazil, Spain and Tunisia have implemented progressive tax reforms; the French public has signaled strong support for a 2 percent tax on the ultra-wealthy; and a proposed California ballot initiative would enact a onetime 5 percent tax on billionaires’ net worth.
But tax justice remains hotly contested. At the OECD/Group of 20 Inclusive Framework negotiations in early January, more than 145 countries agreed to give big American multinationals a free pass. Having been compromised by power imbalances from the outset, the OECD/G20 process was easy for United States President Donald Trump to hijack. Following intensive lobbying by the US, large American energy, technology and pharmaceutical firms secured sweeping exemptions from the 15 percent global minimum tax that had been agreed in 2021 after a decade of painstaking negotiations.
Of course, the OECD/G20 Inclusive Framework could not state its surrender openly. Instead, it suddenly “discovered” that the existing US tax regime was equivalent to Pillar Two of the original agreement, implying that other countries were barred from imposing additional taxes on multinationals headquartered in the US.
But the two are not the same: The global minimum tax applies a country-by-country computation to determine the amount, whereas US rules apply to US-based multinationals’ total foreign profits. The latter allows companies to offset high taxes paid in some countries against zero taxes paid in others, thus restoring the advantages of zero tax jurisdictions.
Not only does this new agreement fundamentally undermine the principle that multinationals should pay a minimum coordinated tax rate wherever they operate, it also grants US-headquartered multinationals a competitive advantage over other multinationals, all of which are still subject to the 15 percent global minimum tax.
The mechanism for this capitulation was revealing. Under threat of retaliation from the US, Group of Seven leaders pre-negotiated the new terms in June and Inclusive Framework members rubber-stamped them last month to avoid picking another fight with Trump.
