Yellen says US opposed to global tax on billionaires

Treasury Secretary Janet Yellen said the United States does not support a global wealth tax on billionaires, opposing proposals put forward by Brazil, France and other countries.

Brazil, which holds the rotating presidency of the Group of 20 (G20) this year, wants the organization to adopt a unified approach to taxing the ultra-wealthy.

The world’s seventh most populous South American country supports a global wealth tax that would prevent billionaires from moving money to overseas tax havens.

Treasury Secretary Janet Yellen said she opposes a global tax on billionaires. AFP (via Getty Images)

Government officials from Brazil, France, Spain, Germany and South Africa have proposed requiring billionaires to pay an annual tax equal to 2% of their total assets.

Supporters of the idea argue that it would reduce wealth inequality and at the same time collect more tax revenue, allowing governments to spend more on social programs.

But Yellen, who is scheduled to meet with Group of Seven finance ministers later this week, said the Biden administration opposes the idea. According to the Wall Street Journal.

“We believe in progressive taxation,” Yellen told the WSJ.

“But when it comes to the concept of a universal arrangement to somehow redistribute profits and tax billionaires, we don’t support the process of trying to achieve that. That’s something we can’t sign on to. Thing.”

The United States is one of the few countries in the world that taxes expatriates based on their overseas income.

Brazil, France, Germany and South Africa are discussing imposing a 2% annual tax on billionaires’ net worth. Shutterstock / New Africa

So even if wealthy Americans move abroad and settle in lower-tax jurisdictions, they still need to file returns with the Internal Revenue Service.

In 2021, Yellen was one of the most vocal supporters of a global corporate minimum tax that would require companies to pay a 15% minimum tax in the jurisdictions in which they operate.

However, Republican opposition to the proposal prevented the bill from becoming law.

The Biden administration has opposed proposals by progressive Democrats, most notably Sen. Elizabeth Warren (D-Mass.), for a “super-rich tax” that would require all households to pay a 2% annual tax. 6% on every dollar of net worth over $50 million and on every dollar over $1 billion.

Instead, the White House is touting a plan that would require Americans with assets over $100 million to pay a 25% annual tax on all income, including unrealized capital gains.

Sen. Elizabeth Warren (D-Mass.) called for a “super-millionaire” tax. Reuters

Capital gains are taxed at a top rate of 23.8%, but only if the asset is sold.

2019 survey by two economists Researchers at the University of California, Berkeley estimated that the 400 wealthiest U.S. households paid an average tax rate of about 23% in the previous year.

According to 2021 IRS data. The top 1% of taxpayers paid 45.8% of federal income taxes.Last year, the top 1% paid 42.3% of federal income taxes, according to the Tax Foundation.

The same analysis found that in 2021, the top 5% of earners paid 65.6% of total income taxes, while the top 10% paid 75.8% of total income taxes, compared to 62.7% in 2020, respectively. and 73.7%.