Global tax on billionaires becomes possibility as Brazil's president cements G20 agreement
Luiz Inacio Lula da Silva met with world leaders including Joe Biden to discuss taxing the ultra-wealthy during the G20 summit.
In short:
A pledge to tax the world's ultra-wealthy has been agreed to in-principle by the leaders of the G20, an international grouping of countries.
Brazilian President Luiz Inácio Lula da Silva pushed the global minimum rate of tax on billionaires, arguing it was unfair for them to pay rates worth effectively 0.3 per cent of their net wealth.
What's next?
The G20 statement laid out future engagement on the issue, but it is unclear if the US will continue to agree after Donald Trump re-enters the White House early next year.
A landmark call for billionaires to be taxed at a minimum rate has been agreed to in principle at the G20 summit, as all countries present endorsed the measure.
A report by economist Gabriel Zucman released in June argued a basic tax rate of 2 per cent on the world's 3,000 billionaires would raise global tax revenues by up to $US250 billion.
G20 host, Brazil's President Luiz Inácio Lula da Silva, has long argued for greater taxes on the ultra-rich, saying the group pays proportionately much less tax than the working class.
The final text of the leaders' declaration released at the close of the Rio de Janeiro summit, on Monday, local time, referenced tax sovereignty specifically but did not outline immediate measures towards implementing the global tax.
"We will seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed."
Instead, the statement notes "cooperation could involve exchanging best practices, encouraging debates around tax principles, and devising anti-avoidance mechanisms, including addressing potentially harmful tax practices."
The wording of the statement matched that of G20 finance ministers in July, who agreed to in-principle support for a minimum global income tax.
Mr Zucman's report outlined how the ultra-rich are able to structure their tax affairs so that they can avoid paying income tax, largely by owning shares in multinational companies and the use of shell "holding" companies.
The result, he argued, is that billionaires effectively pay a tax rate equivalent to 0.3 per cent of their wealth — far lower than the average taxpayer.
The economist responded to the G20's decision by calling it "historic" but said "now is the time to turn words into action" by reforming global systems in order to tax the super-rich.
A 2021 White House study showed that the wealthiest 400 billionaire families in the US paid an average federal individual tax rate of 8.2 per cent, compared to 13 per cent for the average taxpayer.
According to anti-poverty NGO Oxfam, the richest 1 per cent have accumulated $42 trillion in new wealth over the past decade.
It says they have more wealth than the lowest 95 per cent combined.
"Tax the rich" has for years been a battle cry of the global left, while a group of US self-described Patriotic Millionaires have themselves called for higher tax bills.
In Rio, activists projected giant slides on buildings during the G20 summit marked "Tax the super rich for people and planet".
It is unclear if US agreement on the move will change once Donald Trump takes office as the next US president in January.
His campaign benefited from millions of dollars donated by billionaires such as Tesla and SpaceX CEO Elon Musk, who has been appointed to a government role in Trump's new administration.
ABC/AFP
By：ABC(责任编辑：admin)
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