Worldwide scheme to tax billionaires’ wealth technically possible, examine finds

A global scheme to tax the wealth of the world’s 3,000 billionaires is technically possible and will web as much as $250bn (£197bn) a yr in additional income, a brand new report says.

A examine by the French economist Gabriel Zucman concluded that progress to find methods to tax multinational companies meant it was now doable to levy a worldwide tax on people – even when not each nation agreed to participate.

Zucman ready the report after being invited by Brazil – which now holds the presidency of the G20 group of developed and creating nations – to look at methods of accelerating the low ranges of tax at present paid by the super-rich.

“There’s overwhelming public assist for this concept,” Zucman mentioned on the report’s launch. “Ten years in the past no person believed 130 international locations would assist a minimal tax on multinationals. It was regarded as utopian.”

The report mentioned billionaires have been at present paying a mean of 0.3% tax on their wealth – lower than the charges paid by employees. Zucman mentioned the common wealth of the highest 0.0001% of people had grown by 7.1% a yr on common between 1987 and 2024, growing the share of worldwide wealth of billionaires from 3% to 14%.

Describing his plan as a top-up to earnings tax in order that billionaires paid an annual tax invoice price a minimum of 2% of their wealth, Zucman mentioned progressive taxation was a “key pillar of contemporary societies”.

Worldwide cooperation was wanted to stop a “race to the underside”, he mentioned, but it surely was not crucial for each nation to join the thought to get off the bottom. The US opposes a worldwide tax on wealth, though Zucman mentioned Joe Biden’s finances proposal to tax America’s super-rich was constant together with his plan.

Zucman mentioned valuing the wealth of billionaires can be comparatively easy as a result of most of it was held within the type of shares. His report mentioned it may very well be enforced efficiently even when all international locations didn’t undertake it, by strengthening present exit taxes (levies on wealthy folks taking their cash to a non-participating jurisdiction) and implementing “tax collector of final resort”.

This is able to contain extending to people guidelines that enable collaborating international locations to tax non-participating international locations’ undertaxed multinationals.

The proposal might be mentioned at subsequent month’s G20 assembly of finance ministers in Rio de Janeiro.

Oxfam Worldwide’s interim govt director Amitabh Behar mentioned: “This can be a smart and severe proposal that’s in each authorities’s strategic financial curiosity. All G20 international locations ought to assist Brazil’s push to safe the first-ever world deal to tax the super-rich.”

Phil White, member of Patriotic Millionaires UK, mentioned: “Zucman’s report exhibits {that a} coordinated, worldwide strategy to taxing the super-rich is the smart and truthful approach to tackle the acute focus of wealth.

“Addressing billionaire wealth must be considered because the preliminary step; if we goal to safeguard democracy from the corrosive results of maximum wealth, then multimillionaires like me must also be ready to pay extra – and take satisfaction in contributing their fair proportion.”

Extending the plan to these with wealth in extra of $100m (£79m) would elevate a further $100bn-$140bn (£79bn-£110bn) a yr, Zucman mentioned.