I know everyone came here to hear from a person who grew up on the Upper West Side, went to Bronx Science, his father was a professor, and went to a small liberal arts college. Well, hello, I'm Josh Brumberg, the president of the CUNY Graduate Center, and it's my pleasure to welcome you to this morning's event on confronting global inequality.
The Graduate Center is the primary doctoral granting unit of the City University of New York, the largest urban public university in the United States. We offer 49 degrees across the academic alphabet, from anthropology and astrophysics to urban education and women and gender studies.
We are New York City's only public university designated as research intensive and are the leading producer of PhD students of any of the New York State's public institutions. And we proudly graduate the most diverse set of PhD students of any research intensive institution in New York State.
We prepare scholars of all backgrounds to generate new knowledge and seek innovative solutions to pressing local and global issues. We are the home of the Stone Center for research on socioeconomic inequality, and I know that executive director Janet Gornick and Graduate Center distinguished professor Paul Krugman are in today's audience. Thanks for coming.
We also have programs that study topical issues such as international migration, climate change, and of course artificial intelligence. Just this past year, we launched new degree programs in Black, race, and ethnic studies, LGBTQ studies, and public scholarship, equipping our students with the ability to take their ideas from the archives and labs to the public who support us.
Our students are committed to taking the latest knowledge from our seminar rooms and laboratories to the over 120,000 students they teach each year across the CUNY system, providing the best instruction for all the people of the city of New York. As a public institution, we take pride in sharing the insights of our scholars with the public. That's why we are committed to hosting topical conversations like this morning's, and I invite you to come back and visit us for one of our many public programs, free in person or live stream. In fact, both of this morning's conversants, Professors Gabriel Zucman and Professor Joseph Stiglitz, have participated in our past programs, and Mayor Mamdani is always welcome, too. I know our community would be thrilled to have them back at the Graduate Center anytime.
Finally, it is my pleasure to welcome to the stage today's participants in this discussion sponsored by the Mayor's Office of International Affairs. First, in moderating today's discussion, is New York City's Commissioner of International Affairs, Anna Maria Arbella, who throughout her career has strongly advocated for government to work for the people it serves.
And next, one of our two conversants, Professor Gabriel Zucman, a chair professor at the Paris School of Economics and the director of the European Union's Tax Observatory. He has written widely about tax havens and their use in tax avoidance by large corporations and possible solutions.
I'm also very happy to invite up the 2001 Nobel Laureate in Economics, University Professor Joseph Stiglitz from Columbia University, and one of the world's leading thinkers on income distribution.
And a man who of course needs no introduction, Mayor Eric Adams, Kwame Mamdani, the 112th Mayor of New York City, who has advocated for equity across all dimensions to make for a more just society. Mayor Mamdani.
Welcome. Now I will hand the mic off to Commissioner Arbella so she can lead today's important discussion about confronting global inequality. Thank you.
Thank you so much, Professor Brumberg. Good morning, everyone. Good morning. Thank you all for making the choice to be here today. Today is tax day. I hope you either filed your taxes or the form to extend your taxes. But today's tax day, and a lot of people around the world, around the country, are thinking about what is happening with their money.
Where is their money going? Who's paying and who's not paying? And how come, if we are all pulling our resources, how come so many of us are feeling so squeezed? How come so many of us are having such a hard time paying the rent and affording child care and groceries and so much more? And that question is a question that is not just on the minds of people in this city, of people in this country, but it's actually on the minds of people everywhere around the world. This conversation today is a conversation about what it takes to actually address the growing urgent global crisis of extreme inequality.
And I know it's a conversation that matters to everyone around the world because today we have in this room representatives of more than 40 countries. I'm especially thankful to the diplomats who are joining us today from the United Nations, from the International Monetary Fund, from the World Bank, and representatives from missions and consulates of more than 40 countries across Europe, Asia, Africa, the Middle East, Latin America, the Caribbean, North America, and Oceania. Your excellencies, thank you so much for joining us today.
Your presence here reflects something that we know, which is that around the world people are struggling. Most people, millions, billions of people are struggling while wealth and ease and power is accumulated in the hands of very few. And we know that this crisis is not by just natural order. It is the result of policies of decades of decades of economic and political decisions that have allowed wealth to accumulate in the hands of such a small number of people.
And because we know that the concentration of wealth also leads to the concentration of power, we must have this discussion in the context of what it does to not just people but to our democracy. So that's a conversation we're going to have today. We're going to talk about that, we're going to hear from some of the leading economists on inequality and on the economic rules of our economy. We're going to hear about what is the state of inequality today, and what are some of the solutions that are necessary to address this inequality.
And you know, our work draws inspiration from movements from around the world. The Office of International Affairs, which is the office that relates to the diplomatic community, but also speaks to the rest of the world from the roots and the experiences of New Yorkers. We believe that New York City, as a place where the world gathers, as a place where the world lives, has an important role to play in the conversation about how to tackle the crisis that we're facing.
And I am so grateful that today we are joined by Professor Stiglitz, a Nobel Prize-winning economist whose work has shaped the global understanding of inequality, its impact on our democracies, and the policies that are necessary to address it. And we're also joined by Professor Zucman, who is the founder of the International Tax Observatory, whose research on taxing extreme wealth is influencing policy debates across the world. And so, obviously, with our mayor here, we will have a very, very interesting conversation.
So, first, let me start by asking Professor Stiglitz: you recently collaborated with Professor Zucman and many others on the World Inequality Report. Can you help us understand what is happening right now? What is the current state of inequality in the world today?
So, what you said before is right. We have a global inequality crisis. And the last two meetings of the G20 focused on... It's very hard to get an agreement among the G20 these days, but one of the things that there was a broad consensus on is we have a global inequality crisis.
President Ramaphosa of South Africa asked me to chair a commission committee to look at inequality globally, the impact of international rules, why it was increasing so much in so many countries, and what were the drivers and impacts, and what we could do about it.
The report had a very strong... the results resonated very strongly. Partly because there were some very telling statistics. One of them just was that since the beginning of the century, you know, the last 25 years, 41% of all the increase in wealth has gone to the top 1%. And the bottom 50% of the world has gotten just 1% of that increase in wealth. So, inequality has been growing.
New York... well, first I should say, the United States always likes to claim that it does better than other countries. This is one area where we really do excel. We have more inequality than any other advanced country in so many dimensions. But New York, within the United States, also excels.
You know, one statistic there we had, some of you may... the Guardian, we, three of us, published an op-ed today, and one of the things we said in that op-ed is that the average income of a New Yorker is about $131,000.
And if we all shared in that average income, we'd all live reasonably well, even with the affordability crisis. So, you know, 131,000, you could get by. The problem is that a few people at the top are taking a very large fraction of that average, meaning that millions are getting... you know, to get that average, and if a few people are taking off the billions at the top, that means that the rest are getting peanuts below. And that's the struggle that so many New Yorkers face.
I want to say it hasn't always been this way, and in some places and in some countries it's worse than others. Inequality has grown enormously over the past 40 years. There's been more people struggling at the bottom. There's been an evisceration of the middle class. And what we've seen in the last year, two years, is the growth of the oligarchy at the top and the political influence that they have.
One of the things that makes what's going on so disturbing is that it's becoming an inherited oligarchy. One of the statistics in our study that garnered a lot of interest was that it is estimated that over the next decade trillions are going to be passed on from today's billionaires to their children. And so, that's really changing the nature of our country.
This inequality has economic, political, and social consequences. Recent research has shown that it undermines economic performance and leads to societal polarization. But perhaps most disturbing is its effect on our democracy. With a political system in the United States that gives an unbridled role to money in politics, we've become a country better described by one dollar, one vote than one person, one vote.
Of course, as the Bible says, 'The poor you shall always have with you.' But we don't have to have so many of the poor. And today's extremes, combined with the way they're generated, often with exploitation and market power, and the deprivations and loss of opportunity that results, are the center of the affordability crisis that you've talked about so eloquently.
One of the factors contributing to this growing inequality is the unfairness of the tax system, where those at the top — this is really quite remarkable — actually pay a smaller share of their income than those below. President Trump has trumpeted his tax cut, but it was probably the most regressive tax cut in history, with huge gifts to billionaires and rich corporations, miserly cuts to ordinary Americans more than offset by the reduction in health care benefits through the ACA and Medicaid.
The wealthiest revel in not paying their fair share. In the 1960s, the average tax paid by the top 400 was some 50%. Today, it's less than half that. So, the money that we're talking about is a lot because there's so much money at the top. And that money would have made so much difference to the lives of our community and of the people in our community.
And over the last, you know, 50 years, these public expenditures, as we become an innovative, more urban economy, have become even more important. So, on this tax day, April 15th, let us resolve to correct this gross inequity. At least ask the rich to pay their fair share of taxes.
I really don't think that's asking too much.
It's really not. And let me turn, I guess, to Gabriel, who will describe both the inequities in taxation here and abroad and what can be done about it.
Well, thank you. Thank you so much. I want to discuss some good news for once, which is that I think we are at the beginning of an international movement to actually fix some of the problems that Joe mentioned, to finally make the super rich pay their fair share. And that's largely due to some new research that has established the facts, the facts that they pay so little.
We suspected that for a long time, but you have to realize that there is a great deal of opacity about the wealth of the super rich, the income they earn, and the taxes they pay. It's only over the last five, six years that this opacity has started to dissipate thanks to work that's been conducted by different groups of scholars in about a dozen countries. Our International Tax Observatory has been very involved in that project, and which has established that pretty much everywhere — it's not just a US problem. It is very much a US problem, but it goes beyond that. Pretty much everywhere, the super-rich pay much less tax relative to their income than other social groups, often only half as much in tax as what the middle class pays, as what the working class pays.
Now, there was something really important that happened in 2024 when Brazil had the presidency of the G20 and put this issue on the agenda. And in particular, put forward a proposal to address a problem by creating a new principle: the principle that extreme wealth should come with unavoidable duties towards society. That's the idea of an unavoidable minimum tax for billionaires.
With a minimum tax on their wealth equal to 2% of their wealth, the super-rich would contribute at least as much — not even more, you know — they would contribute as much as the rest of the population. Who can be against that? Nobody can be against that. That's why this idea has had such a powerful ripple effect and it's being studied in many countries.
In France, in February last year, the National Assembly passed this 2% minimum tax on the super-rich. It was then blocked by the conservative Senate, but it's going to come back and it is being discussed in a growing number of countries. Look also at what's happening in California, where thanks to the work of the unions, the health care unions, there is a good chance that there will be a billionaire tax that will be put on the ballot in November to create a 5% one-off tax on the wealth of California's billionaires. If it passes, it would be the first ever billionaire tax enacted anywhere in the world.
You know, it is not radical to ask the super rich to pay as much tax as the rest of the population. What's radical is to accept the current status quo, where they are allowed to live in their own... They live in their own parallel society free of tax. That's not acceptable.
And it is by working together, collectively forging a common vision, supporting each other across nations, that we are going to be able to fix that problem. That's why I'm so thrilled, so happy that we are having this conversation here today with the mayor in New York City. This is the beginning of a long journey, a long battle to fight international oligarchy, but I'm very confident that in that battle we shall prevail.
So, Mayor Mamdani, I know that you wake up and you say, 'Tax the rich.' But in all seriousness, you are right now leading an effort to make sure that New Yorkers have the opportunity to live with dignity. That is really what you wake up doing every day. And I'm wondering your reactions to the two presentations we just heard about the state of inequality and the opportunity that is building, you know, and we are part of it, a movement to actually address inequality by taxing the rich.
I think first and foremost, I just want to say thank you for the immense amount of work and scholarship and advocacy that you have both done. It is exactly what has allowed for this moment to be realized by so many in the fight for a fairer world for each and every person who calls it home. And continuing in your tradition of good news, I'll say that so much of that scholarship, that advocacy, we're already seeing the fruits of it. Just last night, we saw an announcement that we are working together with the governor to introduce New York City's first-ever pied-à-terre tax, which will...
This is a tax on properties worth more than $5 million that are owned by people who do not reside in New York City. The super wealthy who can purchase properties and use them to store their wealth, to benefit from New York City's real estate market, but not have to pay back into that same city that generates so much of that wealth in the way that they should.
And that idea of a fairer society is at the principle of all of this advocacy. Because what we are talking about is a recognition of the inequality that has permeated politics through the five boroughs of our city, through our country, through the world. As you were saying, when we talk about how we are excelling, we have to also admit to a number of things.
You know, one is that New York City, we like to compare ourselves to other global cities across the world, as we should. But if we compare ourselves, for example, to Berlin and Madrid, we find in fact that we have 80% higher levels of inequality. If we speak honestly about the levels of inequality in the city, we know that our counterpart in that is Panama, in terms of the levels within that society. And when we look at this city and we correctly describe it as the most expensive city in the United States of America, we do so knowing that when we measure the true cost of living here, it shows that more than 5 million New Yorkers cannot afford it. 62% of New Yorkers cannot afford to live in this city.
And so for all of the discussion of the imagined exodus that would take place were we to tax the wealthiest New Yorkers by the appropriate amount — I say imagined because before I was a mayor, I was a state legislator and I was part of an effort to increase taxes on millionaires at that time. We were told the same thing then. And what we find now is that we have more millionaires today than we did at that time, even after having passed that tax.
And so for all of that conversation about this imagined exodus, we have to reckon with the very real exodus that we are seeing in this city. An exodus of working-class people. An exodus of those who cannot afford to live here. And for many who work here, who now find their residence in Jersey City or in Connecticut or in Pennsylvania, anywhere else where their dollar can go a little bit further.
And we've seen just in a snapshot from 2000 to 2020, this city lost 200,000 of its black residents. That is the cost of inaction. And so that also speaks to the urgency of this conversation and this advocacy. And it is a representation of the fact that while this is a global issue, it is also very much a local issue here in New York City.
Thank you, Mayor Mamdani. So, you referenced one of the objections that we hear all the time about taxing the rich, which is this idea that the wealthy will flee, that they will leave. So, Professor Zucman, you have done a lot of research on this very question. Can you share with us some of that data? What does the data say about the exodus, the myth or the reality of the exodus of the wealthy?
It is largely indeed a myth. And it's more than that, it's frankly almost propaganda that anytime there's a government, whether it's a city, a state, a country, that considers increasing taxes on the very rich, if only a little bit, you have this whole myth and threat of migration that's used by the very wealthy to say, 'No, no, no, you can't tax us, it's never going to work.'
Even though the research is very clear. There's a lot of work, careful empirical studies that have been conducted exploiting tax variation, tax increases or tax cuts, and to see how this correlates with migration. And the overwhelming conclusion is that it's not the case that absolutely nobody leaves, you know, there's not zero response, but it's very small, it's extremely small, much less than what you could infer if you are just reading the newspapers and the headlines.
Perhaps just one example: Massachusetts, 2024, introduced a 4% surtax on million-dollar earners. It has generated much more revenue than what was projected — $3 billion more in 2024-2025 than what had been budgeted. So that's, I think, a good illustration that we should be confident that, you know, especially for a city like New York where, you know, so much is happening that has great amenity value, like economists like to say, it's not a small extra tax on millionaires in New York that could push them to flee the city.
Let me just ask that, you know, if a couple of billionaires were to leave, you know, New York or Massachusetts, you know, is that a problem? You know, that's not clear. And I very much agree with what the mayor said, you know, perhaps New York can afford to lose a couple of billionaires, but we cannot afford to lose its working class.
And I think part of this, it comes back to our vision. Our vision is that everyone stays in the city and that we have room for others to join us in the city. And what we often speak about is that the revenue that we would use from this...
increased taxation, it is to increase the quality of life of the same city that we all call home. So, if you are a billionaire or a millionaire or if you're a working class person, you have to deal with so many of the conditions of the city to varying degrees and varying ways. But when we're talking about this money, it's an investment back into the very things that New Yorkers measure as the efficacy of a city government in providing daily services. We're talking about, for example, we just had our first 100 days. We have a Department of Transportation that filled in 102,000 potholes in that period of time. Now, and I will I can personally attest to the fact that they are doing it at all hours of the day. At midnight, in the morning, at every single hour of the day, they are doing this work. Part of the reason they can do this work is because of the taxation system that allows for the revenue to fund this work. And so often, we speak about aspects of the public sector as if they are guaranteed, as if they are not things that need to be funded, as if they have no relationship to the generation of private wealth. When in fact, these are the foundations of that. And I think to your point, when we're looking at actual studies about migration, the Fiscal Policy Institute, I think it was, that found that the wealthiest New Yorkers leave at 1/4 the rate of other New Yorkers. That when we're talking about actual impacts to migration, the closer correlation is not wealth with new tax status, rather it's whether you're a young family with a child. And you cannot afford child care. Those families are twice as likely to leave as the average New Yorker because of the fact that in the city, child care is more than $20,000 a year. And I'll just go back to to speak about the level of wealth we're talking about. I shared earlier the the pied-à-terre tax. Yesterday, I was standing in front of I think it's 220 Central Park West. Ken Griffin owns a penthouse that he bought, I think, for 228 million, 200 north of 200 million dollars. This is the kind of wealth that is being stored in the city. And it is a residence that is so often empty. And it was actually not that many years ago when a developer told the state senator, Liz Krueger, who represents that district, about a new building to come up and he said don't worry, no one's actually going to live here so it won't have an impact on the need for city services. That's the way it's been built in to our city's life and it's and it's expectation and now is the opportunity to change so much of this.
Yeah, can can I can I just Yeah, and and just reinforce, you know, that spending that we can allow that that the tax revenue allows makes the city more attractive. So, rather than talking about uh people leaving, making solving some of the problems that we have like filling in the potholes makes New York even more attractive. So, why don't you talk about immigration not emigration from from the city. The other thing I'd point out is that as the people of the ordinary New you know, New Yorkers have to leave the city, they have to travel long you know, distances time. That's a hidden tax on ordinary New Yorker who would be ordinary New Yorkers and it it actually if you thought of that time tax is an even greater inequality that we impose in our society.
Yeah. Well, Professor Stiglitz, one of the other objections that we often hear about taxing the rich is that it will produce it will discourage entrepreneurship. It will slow down economic growth. But, during the 40s and all the way to the 60s when the top tax rates in the United States were much higher and the richest households captured a much smaller share of income, the US experienced tremendous economic growth, the growth of the middle class. So, how can you tell us a little bit about You've written a lot about this. Can you tell us a little bit about that objection and what you um understand of it?
