U.S. billionaires have seen their wealth nearly double since the Trump tax cuts took effect in 2017. In the meantime, the planet is getting hotter and the richest 1 percent of humanity accounts for more carbon emissions than the poorest 66 percent. Indeed, the interconnection between climate change and economic inequality has emerged as a central theme in serious economic analyses and a focal point of climate activism.

In the exclusive interview for Truthout that follows, progressive political economist James K. Boyce — who has just received the inaugural Global Inequality Research Award from Sciences Po and the World Inequality Lab for his groundbreaking work in the field of economic and environmental inequalities – explains the main causes behind the broad trend of rising inequality in the U.S. and globally, and how it is linked to environmental degradation.

However, as Boyce makes clear, environmental degradation does not impact everyone equally. Environmental degradation is a class issue as it disproportionately affects the poor, and it is the rich that benefit from environmentally harmful activities. Nonetheless, in spite of the challenges facing us in addressing climate change and inequality, there are economic instruments available to us that, if implemented, will create more equal societies and secure at the same time a sustainable future. This is especially critical as fossil fuel industry bosses are pulling out all stops to convince the world that it should “abandon the fantasy” of transitioning away from dirty energy.

Boyce is professor emeritus of economics and a senior fellow at the Political Economy Research Institute at the University of Massachusetts Amherst. He is the author, among many other works, of Economics for People and the Planet: Inequality in the Era of Climate Change.

C.J. Polychroniou: I’d like to start by asking you to comment on the latest report by the nonprofit Americans for Tax Fairness showing that the combined wealth of U.S. billionaires has nearly doubled since 2017, hitting a record of $5.8 trillion. In light of this report, why does a wealth tax make sense in the effort to reduce inequality?

James K. Boyce: The first thing to say is that nobody “earns” a billion dollars. It’s simply not possible to make that much money by working for it, no matter how hard you work or how smart you are. So we have to ask, where does this enormous wealth come from?

Disproportionate wealth translates into disproportionate political power, and this corrodes democracy.

In 2023 there were 735 billionaires in the U.S. (“a mere 735,” as Forbes put it). If their wealth rose by $2.9 trillion in the past six years, that means they each pocketed on average $39 billion — more than $6.5 billion apiece per year.

To which one might respond: WTF??! How did they do this?

There are three ways a person can accumulate enormous wealth. Winning the lottery is not one of them — the lottery is peanuts compared to the sums we’re talking about here. One way is by outright plunder: taking money and resources from other people, either by naked expropriation (like seizing control of lands and minerals) or monopolization (hence the U.S. term “robber barons”) or grand corruption. The second is by inheritance. If kids could choose their parents, we might say, ‘Well done, junior, you deserve to be rich because you made such a smart choice.’ But kids don’t choose their parents: the inheritors of great fortunes do nothing to deserve them. The third way is through the income spun off by wealth itself — profits, dividends, interest, rents, capital gains — what economists call “returns to capital” as opposed to returns to labor. The real problem is not that wealth grows over time. It’s that so few people have so much of it, while so many people have so little.

The toxic concentration of wealth in the U.S. and many other countries is not only an economic problem. It is a political problem, too. Disproportionate wealth translates into disproportionate political power, and this corrodes democracy. As inequality widens, the ultra-rich become more able and willing to elevate their own self-interest above the public interest. One obvious way they do so is by cutting their own taxes while increasing taxes (and cutting benefits) for everyone else.

Wealth taxes could be a powerful tool to address rampant inequality. The idea here is to tax not just income (the annual flows of money a person receives) but also accumulated wealth held as financial assets, real estate, and so on, above the threshold level that demarcates the ultra-rich. In practice, only a handful of countries have wealth taxes, and the........

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