Billionaire wealth debate shifts to how fortunes are made

Highlights

UBS data shows 70 per cent of 2,919 global billionaires in the financial year to 2025 are self-made, with 40 per cent gaining wealth from sectors linked to rent-seeking.
The article argues that targeted interventions—such as antitrust enforcement, closing US stepped-up basis tax loopholes, and increasing transparency—are more effective than broad billionaire wealth taxes.
Research from Harvard and the University of Chicago cited in the article indicates wealth taxes risk reducing innovative effort and may prompt the wealthy to relocate, affecting investment and business growth.

Routes to wealth and policy design

As argued by the Financial Times, treating every billionaire as evidence of policy failure ignores how globalisation, digitalisation, faster transport and population growth have expanded the scale at which companies and individuals can create value. Businesses that once served millions can now reach billions of customers, lifting revenues, valuations and personal fortunes in the process.

The text identifies three broad paths to billionaire status, productive enterprise, inheritance and rent-seeking. It points to figures such as renewable energy entrepreneur Li Zhenguo and BioNTech co-founder Uğur Şahin as examples of wealth linked to innovations with broad social benefits, while also noting that sports stars including Lionel Messi and Cristiano Ronaldo have accumulated fortunes through global audience demand.

That framework suggests policy should focus less on a fixed wealth threshold and more on the source of wealth. According to UBS data cited in the text, about 70 per cent of the 2,919 global billionaires tracked in the financial year to 2025 are self-made, while roughly 40 per cent made their fortunes in sectors where wealth is more often tied to resource ownership, political connections or speculation, including mining, real estate and finance.

Risks of wealth taxes for investment and innovation

Targeted interventions are presented as more effective than broad attacks on billionaire wealth. These include tighter rules on political donations, stronger antitrust enforcement, fewer state-granted privileges and the closure of tax loopholes such as the U.S. stepped-up basis, alongside measures against opaque ownership structures, shell companies and offshore arrangements.

The argument also warns that wealth taxes may undermine investment incentives and push wealthy individuals to relocate. Research cited from Harvard University's Stefanie Stantcheva says innovative effort is highly responsive to tax rates, while University of Chicago economist Steven Kaplan argues a steep wealth tax could have weakened Jeff Bezos's incentive to sustain Amazon through early losses and the dotcom crash.

The article adds that billionaire fortunes often reflect ownership stakes in public and private equity rather than idle cash, and that governments are not guaranteed to spend wealth tax proceeds efficiently. On that view, policies aimed at abuse, privilege and unfair advantage are less likely to damage the businesses, payrolls and innovation capacity that many large fortunes help finance.

Our earlier report on Britain’s inheritance tax reforms explained how the tighter regime for family-owned companies could squeeze investment budgets and hiring plans by forcing owners to plan for larger future tax bills. We also noted concerns that the changes may accelerate asset sales or push firms toward private equity ownership, with business groups arguing the long-term effect could ultimately weaken growth and even reduce net public revenues.

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