Ministers from four prominent economies, including Brazil, Germany, South Africa, and Spain, propose implementing a minimum 2% tax on the burgeoning wealth of the world's 3,000 billionaires.
This measure aims to generate £250 billion annually to address pressing global issues such as poverty, inequality, and climate change, writes the UK Guardian.
The proposal underscores a growing international consensus on the need for taxing the super-rich to mitigate economic challenges stemming from the pandemic, climate crisis, and regional conflicts.
The ministers urge other nations to join their initiative, highlighting that the funds raised annually could cover the estimated damages caused by extreme weather events in the previous year.
“It is time that the international community gets serious about tackling inequality and financing global public goods,” the ministers say in a Guardian comment piece.
“One of the key instruments that governments have for promoting more equality is tax policy. Not only does it have the potential to increase the fiscal space governments have to invest in social protection, education and climate protection. Designed in a progressive way, it also ensures that everyone in society contributes to the common good in line with their ability to pay. A fair share contribution enhances social welfare.”
Brazil, as the chair of the G20 group comprising both developed and developing nations, has brought forward the discussion on implementing a tax on billionaires during a recent meeting of finance ministers.
French economist Daniel Zucman is currently developing the technical aspects of this proposal, which will be further deliberated upon by the G20 in June.
While France has expressed its support for a wealth tax, Brazil is encouraged by the fact that the US, while not explicitly endorsing a global wealth tax, has not opposed it either.
Recent research by Oxfam reveals that the wealth of billionaires surged by $3.3 trillion, or 34%, by the end of 2023 compared to 2020, driven largely by the boom in asset prices during and after the Covid pandemic.
Meanwhile, a World Bank study indicates that the pandemic halted the progress in poverty reduction.
In an opinion piece, ministers from Germany, Spain, Brazil, and South Africa – representing significant European and emerging economies – argue that taxing the super-rich is crucial and complements ongoing discussions on taxing the digital economy and the recent introduction of a minimum corporate tax rate of 15% for multinational corporations.
“The tax could be designed as a minimum levy equivalent to 2% of the wealth of the super-rich. It would not apply to billionaires who already contribute a fair share in income taxes. Those, however, who manage to avoid paying income tax would be obliged to contribute more towards the common good,” the ministers say.
Comments