Imagine a world where the super-rich contribute more to society through a global tax. This vision is at the heart of a new report commissioned by Brazil for its current presidency of the G20. The proposal put forth by French economist Gabriel Zucman suggests that individuals with over US$1 billion in assets should pay 2.0 per cent of their wealth in income tax, up from the current 0.3 per cent. The implications of this tax are substantial – it could generate up to US$250 billion annually from just 3,000 individuals. This revenue could be directed towards public services like education, healthcare, and climate change initiatives.
Key Points from the Report:
- Currently, global billionaires pay only 0.3 per cent of their wealth in taxes
- Implementing a 2.0 per cent tax could significantly increase annual revenue
- The proposed tax aims to address growing wealth inequality
Zucman emphasized that the super-rich paying proportionally less in taxes perpetuates inequality and undermines the social fabric. He highlighted that a progressive tax system is crucial for maintaining social cohesion and trust in government. The report underscores the exponential growth of billionaire wealth, from 3.0 per cent of global GDP in 1987 to a staggering 13 per cent today.
The proposed tax targets billionaires who fall below the 2.0 per cent threshold, which likely includes a significant portion of global billionaires. The idea has garnered interest from new G20 member the African Union, as well as countries like Belgium, Colombia, France, and Spain. Brazil, as the current G20 president, has prioritized addressing inequality, hunger, sustainable development, and global governance.
Brazilian Finance Ministry representative Felipe Antunes de Oliveira acknowledged that negotiations for a global minimum tax would be challenging but necessary. The widening wealth gap, exacerbated by the COVID-19 pandemic, has prompted calls for such initiatives. Oxfam International praised the proposal, aligning it with governments’ economic interests worldwide.
As we navigate the complexities of taxing the super-rich, the stakes have never been higher. By advocating for this global tax, we can bridge the gap between wealth accumulation and social responsibility. It is a vital step towards creating a fairer, more equitable world.
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