As of 2025, the wealthiest 1% of people in the world hold approximately 45% of all global assets. This is a striking figure, especially considering that four billion people living at or below the poverty line possess only 2% of the world’s capital.

Given this disparity, it’s no surprise that many countries are looking for ways to redistribute wealth, although such efforts can sometimes serve as a cover for targeting excess profits. One of the main tools used in this context is the wealth tax. In this article, we will explore what the wealth tax is and which similar measures are currently in place around the world.

Contents:

  1. What Is a Wealth Tax and How Are Excess Profits Regulated?
  2. Countries With a Wealth Tax
  3. Countries Using Alternative Tax Instruments for the Wealthy
    1. Progressive Income Tax
    2. Windfall Profits Tax
    3. Luxury Tax
    4. Additional Levies

What Is a Wealth Tax and How Are Excess Profits Regulated?

A wealth tax is levied annually on an individual’s total assets. This includes cash, securities, real estate, and other tangible valuables, minus liabilities such as debts. For example, if someone has total assets worth $10 million and the wealth tax rate is 1%, they would have to pay $100,000 each year, on top of any other taxes and fees.

However, wealth taxes are not applied in every country, as introducing such a tax can prompt wealthy individuals to simply change their tax residency. Since almost every country offers citizenship or residency in exchange for investments, this can be an easy move. Governments then face a dilemma: lose potential investors or use other financial tools to extract revenue from the wealthy. Most often, they choose the latter. Common alternatives include:

  • Progressive income tax. The tax rate increases as a person’s annual income surpasses specific thresholds. For example, an annual income of $50,000 might be taxed at 10%, while income of $5 million per year could be taxed at 40%.
  • Excess profits tax. A special levy is applied when profits surge due to extraordinary events, such as price spikes, market shocks, or wars. For instance, if a company earns $1 billion in windfall profits, that amount could be taxed at 25%, resulting in $250 million in tax.
  • Luxury tax. Imposed on the purchase of high-cost goods such as vehicles priced over $200,000 or jewelry worth more than $50,000.

Countries With a Wealth Tax

As mentioned earlier, a few countries maintain an active wealth tax. On the global stage, they are the exception rather than the rule. Countries like France, Germany, and Sweden have abolished their wealth taxes, citing low efficiency. As of 2025, the following countries still retain a wealth tax in their fiscal systems:

  • Spain. The wealth tax (Impuesto sobre el Patrimonio) applies to Spanish residents if their global assets exceed $750,000. Non-residents are taxed only on assets located within Spain. The tax rate ranges from 0.2% to 3.45%, and regional governments may set their own rates within this range.
  • Norway. Norway imposes a net wealth tax (Formuesskatt) on individuals with assets exceeding $155,000 (1.7 million NOK). The basic rate is 1%, increasing to 1.1% for wealth over $1.79 million (20 million NOK).
  • Switzerland. The wealth tax (Vermögenssteuer) is levied at the cantonal level and applies to the total assets of residents. Tax thresholds vary by canton, but generally the tax applies to individuals with assets over $82,000 (around 77,000 CHF) or $327,000 for families. Rates also vary by region, ranging from 0.1% to 1%, with the highest rate found in Geneva.
  • Colombia. The wealth tax (Impuesto al Patrimonio) is officially a temporary measure, though its enforcement is regularly extended. It applies to individuals with assets above $1.2 million and carries a flat rate of 1.5%.
  • Argentina. The wealth tax (Impuesto a la Riqueza), officially called the “solidarity contribution,” is applied to assets exceeding $200,000. The rates are progressive: from 1% for domestic assets to 1.5% for foreign assets, with a maximum rate of 5.25%.
  • Bolivia. Since 2021, Bolivia has enforced a tax on large fortunes (Impuesto a las Grandes Fortunas), which targets residents with assets over $4.3 million. The rate ranges from 1.4% to 2.4%, increasing with the amount of wealth.

Aerial Harder Kulm building with Swiss flag - Interlaken, Switzerland

Countries Using Alternative Tax Instruments for the Wealthy

Instead of direct wealth taxes, some countries employ other methods to increase the fiscal burden on high-net-worth individuals.

Progressive Income Tax

The most effective approach remains a progressive income tax system. For middle-income earners, nothing changes, but those earning significantly more pay a higher rate.

  • United States. The federal income tax rate reaches 37% for individuals earning more than $626,350 annually ($751,600 for married couples). In addition, individuals with annual incomes over $200,000 pay an extra 3.8% Net Investment Income Tax.
  • Germany. The income tax rate increases to 42% for annual incomes above $66,000, and for incomes above $295,000, an additional 3% is added — not a wealth tax per se, but rather a surcharge on income. A solidarity surcharge of 5.5% is also levied on the total income tax amount.
  • Russia. Since 2021, a progressive personal income tax system has been in place:
    • 13%: for incomes up to 2.4 million rubles per year.
    • 15%: from 2.4 million to 5 million rubles.
    • 18%: from 5 million to 20 million rubles.
    • 20%: from 20 million to 50 million rubles.
    • 22%: for incomes exceeding 50 million rubles.

Windfall Profits Tax

Windfall taxes typically target corporations rather than individuals, particularly those in the energy sector, such as electricity providers or fossil fuel companies.

  • United Kingdom. In 2022, a temporary 25% windfall tax was introduced on the profits of energy companies.
  • India. Since 2022, a windfall tax has been imposed on fuel exports in response to rising oil prices. Although there’s no fixed rate, for example, a company earning an extra $500 million might be required to pay about $100 million in tax.

Luxury Tax

Unlike the previous methods, a luxury tax specifically targets the purchase of high-end goods such as expensive cars, jewelry, yachts, and premium land (e.g., private islands).

  • Italy. An annual tax is levied on the ownership of yachts and private jets, reaching up to $10,000 per year depending on the asset’s value. A yacht worth $1 million would incur a yearly tax of about $2,000.
  • China. China introduced an additional 10% luxury tax on high-end watches and handbags. For example, a watch priced at $50,000 would cost $55,000 after tax.

Additional Levies

Beyond the three main approaches, some countries use unique tax measures not widely found elsewhere.

  • India. In addition to progressive income tax, there’s a 10% surcharge on incomes exceeding $600,000.
  • South Africa. A solidarity levy of 5% applies to incomes over $80,000 (about 1.5 million ZAR).
  • United States. The Exit Tax is charged on individuals renouncing U.S. citizenship or permanent residency if their net worth exceeds $2 million. It is calculated as a capital gains tax (up to 23.8%) on unrealized gains. For example, with $10 million in assets and $4 million in gains, the tax would be approximately $952,000. This is a measure aimed at preventing wealthy individuals from moving capital abroad.