July 20, 2024

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Minimum tax on billionaires would raise up to $250bn a year, says report

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A global minimum tax on billionaires raising up to $250bn a year is “technically feasible” and could be successfully enforced even if it was not adopted by every country, according to a report commissioned by the G20.

Gabriel Zucman, an economist and author of the paper, said a co-ordinated minimum tax on the total wealth of the world’s 3,000 billionaires was needed to increase their contributions.

The current effective tax rate of billionaires was equivalent to just 0.3 per cent of their wealth, said the report, which was published on Tuesday. G20 finance ministers meet to discuss the proposals next month.

“Very few individuals agree with the notion that billionaires can have lower tax rates than other social groups,” Zucman, a professor of economics at the Paris School of Economics and at the University of California, Berkeley, told the Financial Times. “The super-rich shouldn’t pay less tax than schoolteachers or fire fighters. That’s just not OK.”

The report recommended individuals with more than $1bn in total wealth, including assets such as real estate, equity stakes and larger corporate shareholdings, pay a minimum amount of tax equal to 2 per cent of their wealth.

This would raise $200bn-$250bn a year, it said. Extending the levy to individuals with a net worth of more than $100mn would raise an additional $100bn-$140bn. Individuals who already pay more than 2 per cent of their wealth in income tax would face no extra tax liability.

Zucman said a level of 2 per cent would help the total tax levy from being seen as regressive for the super-rich. “We’re talking about 2 per cent. That’s not very much. We’re not talking about making it progressive but just making it less regressive.”

The study said developments over the past 15 years, such as the widespread ending of bank secrecy laws and automatic exchange of…

2024-06-25 13:03:12

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