The idea that the wealthiest should contribute more to the cost of government is gaining political traction on both sides of the Atlantic. In the U.S. and Greece, the starting point is similar: Those with greater financial means should pay more. But the proposals differ significantly in what would be taxed, who would pay and how solidly the case is supported by the underlying data.
In the U.S., the debate is being driven by the looming financing problem facing Social Security, the federal retirement program. Without legislative action, the system is projected to reach a point in the early 2030s when it would be able to pay only about 78% of scheduled benefits.
One option attracting attention in Congress is to increase contributions from high earners. Social Security payroll taxes currently apply to earnings only up to an annual ceiling, set at $184,500. Proposals under discussion would raise or eliminate that cap, bringing a larger share of high incomes into the system.
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The idea is showing signs of bipartisan appeal. Republican Sen. Bernie Moreno has joined Democratic Sen. Elizabeth Warren in supporting higher contributions from top earners, while other Republicans have indicated openness to similar changes.
From a policy perspective, the approach has one important advantage: The tax base is relatively clear. Policymakers can identify who would be affected, calculate the income subject to additional contributions and estimate the resulting revenue. Research by the Roosevelt Institute has suggested that completely eliminating the earnings cap could, under certain assumptions, close about 67% of Social Security’s long-term funding gap.
Greece is having its own version of the debate. Alexis Tsipras, the country’s former left-wing prime minister, has proposed what he calls a “patriotic tax” on the wealthy. The political principle is much the same as in the U.S. debate. The difficulty lies in defining who counts as wealthy.
Tsipras has cited data from Greece’s deposit-guarantee fund showing that 0.9% of depositors—those with deposits exceeding €100,000—hold 45.7% of eligible bank deposits.
But that doesn’t mean this 0.9% represents the richest 0.9% of Greeks.
The fund’s definition of a “depositor” isn’t equivalent to an individual citizen. Its statistics include roughly 31.7 million depositors, several times Greece’s population. The same person can be counted at different banks, while joint accounts generate multiple depositor records. Companies and other entities are also included.
There is another problem: Bank deposits aren’t the same thing as wealth. A person with €150,000 in the bank might own little property and carry substantial debt. Someone with €20,000 in deposits could own millions of euros in real estate, shares or business interests. Using deposits as a proxy for wealth could therefore produce a distorted picture of who Greece’s richest citizens actually are.
A Greek “patriotic tax” could avoid some of these problems by focusing instead on very high incomes. Annual income provides a clearer and more readily measurable tax base. A surcharge could, for example, apply only to income above €200,000. Someone earning €220,000 would then pay the additional levy only on the €20,000 above the threshold.
There is also the question of where the money would go. In Washington, higher contributions from top earners are being discussed specifically as a way of strengthening Social Security. A Greek levy would have a clearer economic rationale if its proceeds were similarly earmarked for a defined purpose, such as pensions, healthcare or another identifiable public need.
Ultimately, the credibility of such a tax depends less on its political branding than on its arithmetic. Greece would need to establish how many taxpayers would be affected, how much each income group would contribute, how much revenue would be raised and what financing gap that money would fill.
The principle that those with more should contribute more is simple. Designing a tax that delivers on it is considerably more complicated.
