On July 11, 2023 the European Commission decided to register a European Citizens' Initiative (ECI) entitled ‘Taxing great wealth to finance the ecological and social transition'.

The organizers of the initiative call on the Commission to establish a European tax on great wealth for the benefit of the ecological and social transition. The aim of the initiative is to contribute to the fight against climate change and inequality across the EU, as well as to ensure that European citizens pay their fair share towards achieving these objectives.

The decision to register is of a legal nature and it does not prejudge the final legal and political conclusions of the Commission on this initiative and the action it will intend to take, if any, in case the initiative obtains the necessary support.

As the European Citizens' Initiative fulfils the formal conditions established in the relevant legislation, the Commission considers that it is legally admissible. The Commission has not analyzed the substance of the proposal at this stage.

Text of the proposal

For more than a decade, the European Union has faced an increasing number of crises, be at economic, social, health, geopolitical, or environmental level. These crises are symptomatic of the failure of the economic, fiscal and social policies implemented by national governments and the European Union, which have undermined healthcare systems, public services, environmental protection, and the fight against poverty and social exclusion. The Union's objective is to promote the well-being of its peoples, combat social exclusion, and guarantee social justice and social protection (Article 3 TEU), and its institutions are committed to ensuring greater fairness, particularly in terms of taxation. In reality, however, inequalities have persistently grown, to the point where today the richest 1% of the world's population own almost half of the global wealth and that same 1% also emit more CO2 than the poorest half of the planet.

To meet these challenges, it is urgent to fundamentally reorient the European Union towards a just and democratic climate transition. Several recent European initiatives, in response to the climate crisis, the Covid pandemic and the war in Ukraine, have begun to steer the Union's policies in this direction (Green Deal, RRF, SURE...). The present initiative proposes to perpetuate these policies of ecological and social transition, through the introduction, at the initiative of the European Commission, of a tax on large-scale wealth. Several studies, including one recently carried out by the Laboratoire sur les inégalités mondiales, have demonstrated that such a tax would accelerate the fight against climate change and inequalities. Contributing to the European Union's own resources, this tax would generate revenues that would make it possible to co-finance the ecological and social transition policies pursued by the Union and its Member States, taking into account their objective situation.

The establishment of a European excess wealth tax would also respond to numerous calls from civil society, scientists and elected representatives to this end. Only recently, more than a hundred MEPs, supported by several economists, called on the EU to introduce a progressive tax on extreme wealth. The forthcoming Directive on ensuring a global minimum level of taxation for multinational groups in the Union has already shown that the EU is capable of agreeing on more tax fairness. More generally, the Conference on the Future of Europe stressed the need to harmonize tax policy, and to use it as a lever to fight the environmental crisis.

The introduction of a European excess wealth tax would require three legislative actions.

Firstly, we call on the European Commission to draft a proposal for a directive establishing a European excess wealth tax, based on Article 115 TFEU. This article allows the Council, acting unanimously, to adopt directives to approximate national laws, particularly in the field of direct taxation, where these have a direct impact on the establishment or functioning of the internal market. National differences in the taxation of the ultra-rich are likely to fuel increased tax competition within the Union and create distortions in the internal market. Hence the need for common policy approaches and coordinated action within the internal market, to maximize the positive impact of excess wealth taxation.

Secondly, we invite the European Commission to propose an amendment to Council Decision 2020/2053 of 14 December 2020 on the system of own resources of the European Union, based on Article 311(3) TFEU. The purpose of this amendment will be to allow the European wealth tax to contribute to the system of own resources of the European Union. Such an amendment would also respond to the wish expressed by the European institutions since 2020 to add new own resources, in particular with a view to meeting the repayment of the financial commitments made by the Commission to fund the European Resilience and Recovery Facility (RRF).  

Finally, the new own resource built on the excess wealth tax should be allocated to a fair environmental and social transition, and to funding the Union’s and the Member States’ policies to this end. We therefore call on the European Commission to put forward draft regulations to strengthen the Resilience Facility Fund (RRF), funds linked to Greendeal and to the cohesion policy.  In particular, it will be a question of modifying the regulations 2021/1056 and 2021/241 respectively. These funds are based on cohesion policy (Article 175(3) TFEU). Other legal bases could potentially be used for this purpose, such as the provisions on the environment (Article 192(1) TFEU) or the ones on employment and social policy (Articles 149 and 153 of the TFEU) and development cooperation (art 209 TFEU).

Next Steps

Following the registration, the organizers have six months to open the signature collection. If a European Citizens' Initiative receives one million statements of support within one year from at least seven different Member States, the Commission will have to react. The Commission could decide either to take the request forward or not, and will be required to explain its reasoning.

Once the signature collection has opened it can be found and supported on this website of the European Union.

The campaign website of TAX THE RICH can be found here.

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