Ministers from four leading economies have suggested that the world’s 3,000 billionaires should pay a minimum 2% tax on their fast-growing wealth to raise £250bn a year for the global fight against poverty, inequality and global heating.
In a sign of growing international support for a levy on the super-rich, Brazil, Germany, South Africa and Spain say a 2% tax would reduce inequality and raise much-needed public funds after the economic shocks of the pandemic, the climate crisis and military conflicts in Europe and the Middle East.
Among other things, they are calling for more countries to join their campaign, saying the annual sum raised would be enough to cover the estimated cost of damage caused by all of last year’s extreme weather events.
“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.
Read also: Biden celebrates Earth Day with $7bn ‘solar for all’ investment
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 chairs the G20 group of leading developed and developing countries and put a billionaire tax on the agenda at a meeting of finance ministers earlier this year.
The French economist Daniel Zucman is now fleshing out the technical details of a plan that will again be discussed by the G20 in June. France has indicated support for a wealth tax and Brazil has been encouraged that the US, while not backing a global wealth tax, did not oppose it.
Zucman said: “Billionaires have the lowest effective tax rate of any social group. Having people with the highest ability to pay tax paying the least – I don’t think anybody supports that.”
Research from Oxfam published this year found that the boom in asset prices during and after the Covid pandemic meant billionaires were $3.3tn – or 34% – wealthier at the end of 2023 than they were in 2020. Meanwhile, a study from the World Bank showed that the pandemic had brought poverty reduction to a halt.
Story was adapted from the Guardian.
