A new report commissioned by Brazil in its current presidency of the Group of 20 major developed and developing countries proposes a global tax on the super-rich.
A report by Gabriel Zucman, a French economist who teaches at the Paris School of Economics, proposes that individuals with total assets of more than $1 billion should pay an income tax equal to 2% of their assets.
The report said that the world’s billionaires currently pay 0.3% of their wealth in taxes, but a 2% tax would raise $200-250 billion a year from around 3,000 individuals around the world, which could be used for public services like education and healthcare, and for climate change.
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“The ultra-rich pay relatively little in taxes compared to other socio-economic groups,” Zucman told reporters, adding that the practice exacerbates inequality. He called progressive taxation “a key pillar of our democratic society” and said it is essential to strengthening social cohesion and trust in government.
A new report finds that billionaires now own 13% of global GDP, up from 3% in 1987.
NEWPORT, RHODE ISLAND – JULY 15: A Brazilian flag flutters in the wind during the Infosys Hall of Fame Open at the International Tennis Hall of Fame on July 15, 2022 in Newport, Rhode Island. (Photo by Erica Denhoff/Icon Sportswire via Getty Images)
The proposed tax plan would target billionaires who don’t already pay the equivalent of 2% of their wealth in income taxes, according to the report. Most of the world’s billionaires probably pay less than 2% but it’s hard to be more precise, Zucman said.
He said the African Union, a new member of the G20, as well as Belgium, Colombia, France and Spain had also expressed interest in the proposal.
Inequality is a priority for Brazil’s G20 Presidency, along with reducing hunger, promoting sustainable development and reforming global governance.
Felipe Antunes de Oliveira, from Brazil’s Treasury Ministry, told reporters that a global minimum tax on billionaires would be one way to raise funds to address these challenges.
He acknowledged that the road ahead will not be smooth.
“We expect the negotiations to be protracted,” Oliveira said, repeating similar comments made by Finance Minister Fernando Haddad when the proposal was first discussed in Sao Paulo in February.
Anti-poverty group Oxfam International said the gap between the super-rich and the majority of the world’s population has widened since the coronavirus pandemic, and the group praised a new report.
“This is a sensible and serious proposal that is in the strategic economic interest of all governments,” interim executive director Amitabh Behar said in a statement.
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A 2023 study by the advocacy group Tax Justice Network estimated that countries around the world could lose up to $4.8 trillion in tax revenue over the next decade due to the use of tax havens by individuals and companies.
