EU Tax Observatory eyes broader G20 support for minimum tax on billionaires

12:44 pm Thursday, May 23rd, 2024

By Marcela Ayres and Bernardo Caram

BRASILIA (Reuters) – A minimum tax on billionaires is likely to gain wider traction among the G20 group of the world’s largest economies as they get clarity on the proposal, French economist Gabriel Zucman of the independent European Union Tax Observatory said in an interview on Wednesday.

Zucman, an architect of the proposal, is preparing a report for the G20 finance ministers in July at the request of Brazil, which is chairing this years’ meetings. He showed optimism about progress on the idea, presented by Brazil just three months ago.

“The hope is to have a declaration (in July) by a number of countries, as many countries as possible, on taxation,” Zucman said ahead of a research symposium in Brasilia on Thursday to discuss proposals for the global minimum wealth tax.

France, Spain, Colombia, Belgium and the African Union have expressed support for the idea, along with South Africa, which will assume the G20 presidency next year.

“I am deeply moved to see how quickly this proposal has gained traction,” Brazilian Finance Minister Fernando Haddad told the symposium in Brasilia on Thursday.

Zucman said studies have shown a 2% minimum annual tax on roughly 3,000 individuals with at least $1 billion in wealth could raise about $250 billion per year. His G20 report will include variations including other tax rates or a broader base of contributors, such as fortunes over $100 million.

Zucman suggested a system akin to the global minimum tax on multinational corporate profits, allowing governments to levy extra taxes on companies from non-participating nations. With that framework, he said, the policy could be effective even without a specific minimum number of countries adopting it.

U.S. Treasury Secretary Janet Yellen this week rejected the idea of a global arrangement for taxing billionaires and redistributing proceeds, according to the Wall Street Journal.

However, Zucman said he was holding out hope that the United States would come around, noting that Yellen had specifically rejected the idea of a global redistribution of wealth, which is not central to his proposal.

“What’s being discussed is creating a common standard, which is about the minimum taxation of the super-rich,” he said.

(Reporting by Marcela Ayres and Bernardo Caram; Editing by Brad Haynes and Marguerita Choy)