Why taxing billionaires is trending – and pricing carbon isn’t
Storytelling beats complexity in the fight for public attention
Wealth taxes are having a moment. Once written off as practically and politically unfeasible, discussion of new taxes that would address the unfairness of how little tax the super-rich actually pay has entered mainstream debate. A one-time wealth tax looks likely to make it on to the ballot in California. Economist Gabriel Zucman is all over the podcast circuit promoting his latest book calling for a minimum 2% wealth tax on billionaires. Last week, more than 100 British millionaires made headlines around the world by calling for their own wealth to be taxed with the simple, albeit obvious, sound bite: “We can afford it”.
While the wealth tax debate is trending across media, politics, and social platforms, the debate about carbon taxes that put a price on greenhouse gas emissions remains comparatively muted, despite current controversies around the EU’s Emissions Trading System (ETS).
The two policies work very differently to solve very different problems. But the dynamics driving support for taxing the very rich offers clear parallels that are relevant to building support for carbon taxes.
The first parallel is injustice. Wealth taxes resonate because people see a clear unfairness: extreme concentrations of wealth on one side, and stagnant wages and shrinking opportunities on the other. In most countries, the contrast is stark. Ordinary workers pay tax on every paycheck, while the very richest can avoid most income tax entirely by borrowing against their assets. Progressive income taxes raise rates for upper- and middle-income earners, but only up to the point where people become wealthy enough to go without conventional income entirely and hire professionals to minimise the rest. For the very rich, paying tax seems entirely optional.
Carbon taxes share a similar moral logic: pollution caused by emissions of CO2 and other greenhouse gases imposes costs on everyone equally, yet research has shown that the richest 10% of the world’s population account for almost half of all emissions, while the poorest 50% account for one-tenth. The emissions of the top 1%, meanwhile, contribute 20 times the average per-capita warming impact. The beauty of carbon pricing is that the tax burden l is born proportionally. Those who emit more, pay more, pay more.
That fairness is a double-edged sword, however. France’s gilets jaunes movement in 2018 and the more recent backlash against Canada’s consumer carbon tax demonstrated what can happen if governments find themselves on the wrong side of the fairness issue. Carbon pricing policies must be designed so that tax paid by those who choose to emit the most carbon is used to offset taxes on those who have no choice. Carbon taxes must be positioned as a way to remove hidden and unjust subsidies for polluting, not a way to punish consumers for their choices.
Keep it simple
Wealth taxes are gaining popular support partly because their narrative is extraordinarily simple: a small group of ultra-rich individuals hold a massively disproportionate share of resources, so taxing extreme wealth is a matter of fairness. You don’t need to be an economist to grasp the argument: the story is moral, intuitive, and emotionally resonant.
The narrative for carbon taxes, by contrast, is complex. The logic in support of carbon taxes is economically elegant (systematic correction of negative externalities, anyone?) but emotionally flat. Where people want to hear a compelling moral argument, they are instead treated to a din of jargon about emissions trading systems, revenue recycling, and price signals rather than a simple and compelling idea. So, even though carbon taxes are far more proven, scalable, and administratively straightforward than wealth taxes, they remain abstract, technocratic and remote in the public’s mind.
But carbon-tax advocates can borrow directly from the wealth-tax narrative playbook:
First, lead with fairness: polluters impose costs on everyone else; a carbon tax makes them pay their share.
Second, personalise the stakes: extreme emitters produce nearly half of emissions, while those who can least afford it end up bearing the cost.
Third, emphasise the tangible benefits, not the mechanisms: carbon taxes improve quality of life, protect future generations and – most importantly, when coupled with a dividend – deliver immediate financial benefits for most households.
One other dynamic has less to do with the message and more with how it’s being told – and who’s telling it. Wealth taxes have recently been championed by figures like Gary Stevenson in the UK, who translates structural inequality into relatable narratives. Mainstream thought leaders like Ezra Klein, Paul Krugman, and Rory Stewart and Alastair Campbell have given platforms to otherwise obscure economists to make their case.
Carbon taxes lack similarly prominent or popular storytellers. So the debate around carbon tax remains technocratic, ponderous and abstract. It tends to focus on the details of existing policies like the EU ETS and often gets tripped up by both the valid concerns and misinformation posed by carbon tax opponents. Carbon taxes need more media like France’s Le Monde to take a leadership position on the issue. They need the Ezra Kleins and Paul Krugmans of the world to bring the ideas of economists who support carbon pricing (there are thousands of them) to life. Not everyone needs to agree, but a higher profile public debate is needed.
They need more grassroots organisations like the Citizens Climate Lobby in Europe to keep politicians’ focused on measures that not only address the climate challenge but also their constituents’ cost-of-living concerns.
Wealth taxes didn’t suddenly pop up from nowhere. On the contrary, they’ve been debated by economists and proposed by political parties (usually on the far left) for decades. What has changed is the context. Widespread dissatisfaction with the wealth and power of the 0.001% has translated into mainstream discussion of once unpalatable solutions. The ethics and efficacy of wealth taxes is of course debatable. But it’s no longer possible to ignore the debate.
That momentum demonstrates the potential for narrative to push complex policies into the political mainstream. It’s not hard to imagine that increasingly frequent and extreme weather events could do the same for carbon pricing. The lessons and tactics for carbon-tax advocates are clear: Frame carbon pricing as a matter of fairness. Use simple narratives that resonate emotionally rather than technical explanations. And find the right voices to cut through the noise, address objections, and bring both the power and the practicality of the carbon taxes to life.