Pelle Dragsted, a leading figure in the Unity List party, has proposed a new tax targeting billionaires in Denmark, igniting a heated debate about wealth inequality and its potential consequences. The proposal involves imposing a two percent tax on fortunes exceeding one billion dollars, approximately 6.5 billion kroner.

The suggestion has drawn sharp criticism, with opponents arguing it’s impractical and could harm the Danish economy. Critics suggest that implementing such a tax solely within Denmark would lead to billionaires relocating their assets to countries with more favorable tax laws, ultimately reducing the country’s overall wealth.

Dragsted defends his proposal by pointing to the work of French economist Gabriel Zucman, who advocates for a global minimum tax on billionaires to address wealth inequality. Zucman’s plan, which has been discussed at the G20 level, differs from Dragsted’s in that it aims to ensure billionaires pay a minimum level of tax without necessarily eliminating their wealth.

Zucman’s broader concept suggests the billionaire tax should be seen as an extension of income tax. Under this framework, billionaires already paying at least two percent of their fortune in existing taxes would not be subject to the additional billionaire tax.

This raises questions about the practical impact of Dragsted’s proposal in Denmark, where existing taxes are already high. It’s argued that many Danish billionaires likely already pay more than two percent of their wealth in various forms of taxation, diminishing the potential impact of the proposed billionaire tax.

The debate highlights a fundamental disagreement about the role of wealth and taxation in society. While proponents argue that billionaires should contribute more to address inequality, critics warn against policies that could drive away wealthy individuals and harm the economy.