G20 pushes proposal to tax the world’s super billionaires

The United States would not support the proposal to tax the world’s super billionaires; something that would be under consideration at the G20.

The proposal to tax supermillionaires under discussion at the G20, seeks to tax the earnings of the super-rich with a global tax and prefers progressive payment according to income in the country.

A proposal being considered by some members of the G20 group of advanced economies that would impose a proposal to tax the world’s supermillionaires does not have the support of the Biden administration, U.S. Treasury Secretary Janet Yellen said Monday.

Yellen told the Wall Street Journal that the U.S. favors progressive taxes, under which the wealthy pay a larger share of their income than those of lesser means.

However, she said, that the proposal to tax the world’s supermillionaires with profits redistributed in some way, they would not support, “That’s something we can’t sign on to.”

The plan will have little chance of being implemented without U.S. support, even though it appears to have the backing of the leaders of some major economies such as France and Brazil.

The proposed U.S. position to tax the world’s super billionaires contrasts with its support for a global minimum tax on international corporations, for which Yellen helped broker a deal early in President Joe Biden’s term.

The aim of a proposal to tax the world’s super billionaires would be to prevent them from evading taxes by moving their money across borders or to tax havens that tax authorities in their home country cannot reach.

G20 pushes proposal to tax the world’s super billionaires: No US support

Taxing wealth rather than income, which is normally where levies are focused, would prevent billionaires from exploiting investment strategies that allow them to grow their wealth while generating little taxable income.

Speaking at the G20 finance ministers’ meeting in February, economist Gabriel Zucman, director of the EU Tax Observatory, cited evidence showing that the current global taxation of billionaires is regressive.

READ MORE: THE CLUB OF BILLIONAIRES IN THE WORLD: RECURRING NAMES.

In that sense, it means that the effective tax rate they pay is lower, sometimes much lower, than the rates paid by average taxpayers.

Zucman’s organization has estimated that a 2% annual tax on the wealth of approximately 3,000 billionaires worldwide would generate about $250 billion in revenue each year.

That revenue leads many in the G20 to consider pushing the proposal to tax the world’s super billionaires.

Addressing a G20 meeting in Washington last month, MIT professor and Nobel Prize-winning economist Esther Duflo spoke in favor of the 2% tax, as well as a global tax on international corporations, and argued that revenues should be directed to help poor nations as they struggle to adapt to climate change.

He characterized the obligation of rich nations to help poor countries manage the climate transition as a “moral debt” and said that demanding that the ultra-rich pay more is only fair.

At the same meeting, Brazil’s Finance Minister Fernando Haddad defended the focus on international taxation of the rich as essential for economic justice.

“Each country can go a long way individually (…) However, without international cooperation, there is a limit to how far nation states can go. Without cooperation, those at the top will continue to evade our tax systems.”