A new report commissioned by Brazil for its current presidency of the G20 nations proposes a global tax on the super-rich. According to the report, individuals with more than $1 billion in total assets would be required to pay 2% of their wealth in income tax. Currently, global billionaires pay only 0.3% of their wealth in taxes, highlighting a significant disparity in tax contributions.
The proposed 2% tax could potentially generate $200 billion to $250 billion annually from around 3,000 individuals. This substantial revenue could be utilized to fund essential public services like education, healthcare, and initiatives to combat climate change.
The report emphasizes that the super-rich paying proportionately less in taxes than other socioeconomic groups contributes to widening inequality. The implementation of a progressive tax system is deemed crucial for enhancing social cohesion and fostering trust in governments.
Notably, billionaires now possess 13% of the world's GDP, a significant increase from 3% in 1987, underscoring the concentration of wealth among a select few.
The proposal has garnered interest from various countries, including the African Union, Belgium, Colombia, France, and Spain. Brazil, during its G20 presidency, has prioritized addressing inequality, hunger reduction, sustainable development promotion, and global governance reforms.
Brazil's Finance Ministry acknowledges that negotiations for the global minimum tax on billionaires are expected to be challenging. Despite the anticipated hurdles, the proposal is seen as a strategic economic move that could help bridge the wealth gap and advance critical socio-economic agendas.
Anti-poverty organization Oxfam International has lauded the proposal, noting that the wealth disparity has widened further during the COVID-19 pandemic. The organization views the tax initiative as a sensible and serious step that aligns with governments' economic interests.
Additionally, a study by the Tax Justice Network suggests that countries worldwide stand to lose up to $4.8 trillion in tax revenue over the next decade due to the exploitation of tax havens by individuals and businesses, further underscoring the need for comprehensive tax reforms.
