Brazil, one of the most unequal countries in the world, wants to take advantage of its rotating presidency of the G-20 to propose to its partners that they agree to impose a global minimum tax on the richest among the billionaires. Defenders of this initiative consider it an important step to close the growing gap between those who accumulate the most wealth and the rest. The Brazilian president, Luiz Inácio Lula da Silva, defended it this Thursday in the following terms after meeting with his Benin counterpart, Patrice Talon: “If the 3,000 billionaires of the planet would pay 2% taxes on the return on their fortunes, we could generate resources to feed the 340 million people who, according to the FAO, suffer serious food insecurity in Africa.”
Last February, his Government commissioned French economist Gabriel Zucman, director of the EU Tax Observatory, to translate Brazilian political will into a detailed proposal to present at the G20 finance ministers’ meeting next July in São Paulo. Zucman, who visited Brazil this week, presented a draft on this tax to the Executive this Thursday. All over the world, the very rich pay less taxes than the middle classes and the poor. Also in Brazil, which has an extremely complex tax system that also punishes the poor and rewards shareholders.
Zucman estimates that the billionaires They pay 0.3% taxes on their wealth, as explained this Tuesday in a meeting with correspondents in Brazil.
The Frenchman is betting on a global tax for those who own more than a billion dollars, which is about 3,000 people, according to an estimate that he himself considers conservative. Together, they treasure “about 13,000 billion dollars, an average of 5,000 million each.” His proposal aims for a minimum global tax of 2% of his fortune. He considers this route the most effective given that “income taxes do not work in the case of the rich and because the inheritance tax is charged only once.”
The economist calculates that with this minimum rate they would be able to raise about 250,000 million dollars. The countries of residence of those billionaires They would receive the money that corresponded to each one and would decide what to spend it on, he said. The ultra-rich are spread across almost the entire planet. It is estimated that about 800 are in the United States, 800 in Southeast Asia, about 500 in Europe, more than 100 in Latin America…
Although this is a debate that has just begun, the reception garnered so far allows the economist, a disciple of Thomas Piketty, to be optimistic: “Basically, we are seeing real momentum, with several countries expressing their support. Brazil, of course, but also France, South Africa, Spain, Colombia and Belgium. It is impressive,” he emphasizes. “The G-20 is a powerful forum to move forward,” he adds.
The Frenchman considers US President Joe Biden a valuable ally in this push to tax those at the top of the global wealth pyramid, but admits that a victory for tycoon Donald Trump in the November elections would be a major setback. In that case, he said, “I don’t expect the United States to lead this debate.”
In any case, he maintains that, to prosper, an initiative like this needs to take root in a considerable group of countries, but its success, he insists, is not conditional on everyone embracing it. He believes that this proposal can start viably if it is adopted by 30 or 50 countries.
This new tax is inspired by the global minimum tax of 15% on large multinationals proposed by the OECD (Organization for Economic Cooperation and Development) and agreed upon by some 140 countries, 35 of which have already begun to apply it, he highlighted. Zucman. If the tax on billionaires becomes a reality, according to him, this very select group “will pay more than what is collected from 15% of the multinationals.”
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