Economics, which is too focused on mathematical models, must question inequalities more systematically, according to the French economist.
Let's celebrate. The American Economic Association (AEA), the main professional organization for economists in the United States, has just awarded the Clark Medal to Gabriel Zucman for his work on the concentration of wealth and tax evasion. Awarded each year to a winner under the age of 40, the distinction is given in particular for innovative work demonstrating the considerable importance of tax evasion by the richest, including in Scandinavian countries, which are often considered models of virtue. Endowed with an immense capacity for work, a rare attention to detail and an unparalleled talent for unearthing new data and making it speak for itself, Gabriel Zucman has also revealed the unsuspected extent of corporate tax evasion by multinationals in all countries.

Now director of the European Tax Observatory, he devotes the same energy to finding solutions to the ills he documents. In one of its first reports, the Observatory demonstrated that EU Member States could choose to go further than the 15% minimum rate set by the OECD (which is too low and largely circumventable), without waiting for unanimity. By imposing a 25% rate on the profits of each multinational company wishing to export goods and services – the same as that paid by domestic producers – then France would gain an additional €26 billion in revenue and encourage other countries to do the same.

The fact that the AEA has chosen to reward this work is important because it shows that the core of the profession is beginning to realize that the current social and fiscal model is unsustainable. Let us not overstate the case: economists have always been less monolithic than is sometimes imagined, including in the US. In 1919, AEA President Irving Fisher chose to devote his Presidential address to the issue of inequality. He told his colleagues that the growing concentration of wealth was becoming America's main economic problem, and if left unchecked, America would become as unequal as old Europe (then perceived as oligarchic and contrary to the American spirit). Fisher was distressed by Willford King's 1915 estimates that "2% of the population owns more than 50% of the wealth", and that "two-thirds of the population owns almost nothing," which he saw as "an undemocratic distribution of wealth" threatening the very foundations of American society.

It is in this context that the United States applied rates of over 70% at the top of the income hierarchy from 1918-1920 (under the Democrat Wilson), before any other country. When Roosevelt was elected in 1932, the intellectual groundwork had long been laid for the introduction of a high degree of tax progressivity, with the famous Victory Tax of 88% in 1942 and 94% in 1944. The United States would apply similar rates in Germany and Japan: in the spirit of the times, these fiscal institutions were seen as an indispensable complement to democratic institutions, without which the latter might sink into a plutocratic drift.

Victory Tax

Thomas Piketty: 'Economists beginning to realize that the current social and fiscal model is unsustainable'

French economist Thomas Piketty argues that economists are increasingly recognizing the unsustainability of the current social and fiscal model due to growing wealth inequality. The American Economic Association (AEA) has awarded the Clark Medal to Gabriel Zucman for his research on wealth concentration and tax evasion, particularly among multinational corporations. Zucman's work highlights the extent of corporate tax evasion globally, including in Scandinavian countries. As director of the European Tax Observatory, he proposes that EU member states adopt a 25% profit tax on exported goods and services—matching domestic rates—to generate an additional €26 billion for France and incentivize similar policies across the EU. The award reflects a growing awareness within the economics profession that existing tax and wealth distribution systems are flawed, echoing historical U.S. responses to inequality such as high top marginal tax rates during the 1910s–1940s under Wilson and Roosevelt.