Proposal to tax global billionaires: could raise $250 billion annually
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The study, commissioned by Brazil in its capacity as the current G20 president, suggests that the proposal to tax multimillionaire individuals is feasible in line with the taxing of multinational corporations, which is in progress, and could generate up to $250 billion annually from the wealth of the world’s 3,000 billionaires, The Guardian reported.
According to a recent report by French economist Gabriel Zucman, there is a growing disparity in tax contributions, with billionaires paying an average of just 0.3% in taxes on their wealth, while the average tax rate for ordinary workers is significantly higher.
Zucman’s findings underscore the rapid growth of billionaire wealth, which has expanded at an average rate of 7.1% per year from 1987 to 2024, increasing their share of global wealth from 3% to 14%.
Zucman’s proposal advocates for a supplementary income tax that ensures billionaires pay an annual tax amounting to at least 2% of their wealth. He emphasizes the importance of progressive taxation as a cornerstone of modern societies, arguing that coordinated international efforts are essential to avoid a "race to the bottom" in tax rates. While the United States opposes a global wealth tax, Zucman notes that President Joe Biden's budget proposal to tax America's super-rich aligns with his plan.
The report suggests that valuing billionaire wealth would be straightforward, as most of it is held in shares. It also outlines mechanisms to enforce the tax, even if not all countries adopt the scheme.
Strengthening exit taxes, which target wealthy individuals moving their money to non-participating jurisdictions, and implementing a "tax collector of last resort" system are among the proposed methods. This system would allow participating countries to tax under-taxed multinationals from non-participating countries, extending these rules to individuals.
The proposal is set to be a key topic of discussion at the upcoming G20 finance ministers' meeting in Rio de Janeiro. Advocates argue that this initiative is in every government’s strategic economic interest. They contend that a global wealth tax is a sensible and fair approach to addressing the extreme concentration of wealth and its potential threats to democracy.
Supporters, including organizations like Oxfam International and groups such as Patriotic Millionaires UK, believe that addressing billionaire wealth is only the first step. Extending the tax to those with wealth exceeding $100 million could raise an additional $100 billion to $140 billion annually. They stress the importance of affluent individuals contributing their fair share to support societal needs and promote economic equity.
As discussions move forward, the proposal represents a significant step toward a coordinated international effort to tax the super-rich, potentially reshaping the global economic landscape and addressing longstanding issues of wealth inequality.
