John Rosenthal
February 6, 2026
Europe is grappling with shifting international political priorities, with challenges to long-held notions of alliances and rising tensions between increasingly conflicting policy priorities. Demands for more money for national defense clash with the entrenched generosity of the welfare state.
As these tensions continue to rise, it becomes impossible for Europe’s political leaders to stay in denial regarding the continent’s deeply rooted economic stagnation. With an economy that is barely even going to grow by 1.5% per year for the rest of the decade, the conflicts between fiscal priorities will only grow stronger and more disruptive for Europe’s system of government.
When an economy expands at such tepid rates as 1.5% or less, it is in a state of industrial poverty. The standard of living cannot increase until the growth of economic resources is at double that rate; children grow up to a life no better than what their parents enjoyed—and that parity comes at a heavier struggle for the growing generation.
This is not sustainable. Unless it breaks free from its economic stagnation, Europe will not survive as a first-world economy for much longer.
Fortunately, Europe is not without solutions; its own history has a remedy to offer. That remedy turns a stagnant economy into an engine of opportunity, growth, and rising standard of living.
We collect those forces under one umbrella: capitalism.
Yes, Europe needs to return to its capitalist roots. It needs to revive the old spirits of seizing opportunities, of groundbreaking entrepreneurship, of venture investments and the pursuit of profits. Those who work harder, take more risks, pursue bolder ideas, and make more money should be hailed as heroes; they should be admired and respected for their courage and the value they create.
Today, Europe is far from a capitalist revival. Far too many European governments tax, spend, and monopolize nearly half of the economy. The other half, the private sector, is burdened by regulations, harnessed by taxes, confined, subdued, and humbled. The public attitude to business activity is not helping: most of Europe sneers at the pursuit of profits—and, by consequence, the creation of jobs and economic value—for being almost anti-civilizational.
As a testament to just how far Europe has gone off the proven path to prosperity, there is a wave of anti-rich tax policy proposals making their way across Europe. A year ago, Germany’s Die Linke, the far-left party in the Bundestag, proposed the use of tax policy to make sure there would not be any rich in the country:
The party proposes a sliding scale, 1% for fortunes in excess of €1 million ($1.03 million), 5% for those higher than €50 million, and 12% for those higher than €1 billion. Next, the party calls for a one-off fee for the richest 0.7% of citizens, starting at 10% for those with more than €2 million, and rising as high as 30% for larger sums. The party also aims for a higher inheritance tax for larger estates, and higher rates of income tax for top earners. This would include a 60% income tax on salaries above €250,000 and 75% for those over €1 million. Finally, capital gains taxes should no longer be a flat 25% fee, but rather should operate on a sliding scale like income tax depending on the extent of the gains on assets.
In August, the leftist SPD—which co-governs Germany with the nominally conservative CDU—generally concurred with Die Linke by expressing sympathy for the idea of more hate-the-rich taxes.
A couple of weeks later, Chancellor Merz, who leads his CDU’s coalition with the SPD, explained that no such tax was on the table. Nevertheless, the two coalition partners continue to disagree on this tax item; the fight to protect Germany from even more confiscatory taxation is far from over.
France has its own problems with the disastrous Zucman tax. Despite not being part of the recently forced-through budget, it is unlikely to disappear from the political agenda. In fact, the Zucman tax has morphed into a global hate-the-rich campaign. We hear echoes of it even in America, where the mayor of New York is trying his best to punish his own wealthy supporters with a Zucman-style hate-the-rich tax.
The Swedish Left also wants to be part of this prosperity-plummeting tax movement. Gearing up for the general election in September, the far-left Vänsterpartiet has proposed a tax on Swedish billionaires; given that SEK100 is equal to less than €10, by international comparison, this is probably the most aggressive hate-the-rich tax currently on the table in Europe.
If there is a new leftist government in Sweden after September, there is a good chance that taxes will go up on wealthier Swedes. The social democrats, the largest party on the left, proposed a new levy on ‘the rich’ already in 2023. At that time, the idea was to use the extra revenue to reinvigorate the ailing Swedish military, but that purpose is already dated and dusty. In January, the social democrats announced that they want their version of the billionaire tax to also pay for a national plan for improving elder care.
For the time being, the wave of hate-the-rich tax proposals is meeting with enough parliamentary resistance to protect Europe’s fragile economy from the disastrous consequences of further punishing job creators. However, as Europe sinks deeper into its self-made economic stagnation, that resistance will wear down—unless right-of-center political leaders have a better vision to offer.
That vision must, for all intents and purposes, be a plan to revive European capitalism. It may sound like a radical idea, and given today’s political climate, it certainly is. However, that does not mean it is pointless—quite the contrary. There is only one path forward for Europe: capitalism coupled with a strong foundation of traditional European values.
