Following on from the recent scandal, which detailed the widespread scale of global tax evasion and tax avoidance through the use of offshore funds and shell companies, Piketty says the explosive revelations have merely highlighted the lack of EU governance on the financial system since the 2008 global financial crisis.
"Unfortunately, there is in this field an abysmal gap between the victorious proclamations of governments and the reality of what they do," he wrote in a blog for French newspaper Le Monde.
"In 2014, the LuxLeaks survey found that multinationals hardly pay any taxes in Europe, with subsidiaries in Luxembourg. In 2016, the Panama Papers show the extent of assets concealment made by the financial and political elites of the North and South.
"We can rejoice in the fact that journalists do their job. The problem is that governments do not do them. The truth is that almost nothing has been done since the crisis of 2008. In some ways, things have gotten worse."
Tax Haven 'Sweetheart' Deals — Root of Problem
Hugely critical of EU action on the issue of tax, Piketty took aim at the low company tax rates and "sweetheart deals" given to companies in countries like the UK and Ireland, while he also described the low-tax practices of some British Overseas Territories and Crown Dependencies as "predatory."
LuxLeaks, Panama Papers: l’hypocrisie européenne https://t.co/jjTyrZ2Rur— Thomas Piketty (@PikettyLeMonde) April 12, 2016
In order to crack down on tax havens, and to put pressure reluctant partners to do the same, he suggested some of the EU's major economies band together to introduce a common taxation policy.
He says that if France, Germany, Italy and Spain — four countries that make up 75 percent of the EU's GDP — joined forces and agreed on a treaty "based on democracy and fair taxation" combined with "a common tax on large companies," then it would force others, such as the UK, to follow suit.
Strict Rules Needed
Transparency campaigners have been critical of EU efforts aimed at forcing multinational corporations into tax compliance, arguing that even if implemented, the measures won't do enough to change the actions of large corporations and tax havens.
Piketty agreed, saying governments wouldn't solve the problem by "politely asking" tax havens to change their ways.
"It is urgent to accelerate the process and to set up heavy trade and financial sanctions for countries that do not respect strict rules," he wrote.
"Let us make no mistake: only a repeated application of such penalties… will establish the credibility of the system and out of the climate opacity and existing widespread impunity for decades."