A new 2% tax on the 2,756 people in the world with wealth exceeding $1 billion would raise $214 billion, according to the European Fiscal Observatory, which proposes the tax to boost low tax rates to correct those they have been subjected to.
In a report published this Monday, the organization led by French economist Gabriel Zucman, with whom Nobel Prize winner Joseph Stiglitz is directly associated, highlights that billionaires bear tax rates of just 0% to 0.5% of their assets.
One of the reasons why their tax rate is considerably lower than that of other population groups is this: in many cases they can rely on instruments such as partnerships (in the form of holding companies) to house mainly financial assets, which exempts them from paying taxes on dividends.
The study authors also note that the wealth of this small group of billionaires has increased by an average of 7% per year since 1995. This ignores the effect of inflation.
By region, of the 2,756 people with assets over $1,000 million (nearly $13 billion in total assets), 835 are North American, 499 European, 838 from East Asian countries, and 260 from South and Southeast Asia. Asia, 105 Latin Americans, 133 from Russia and Central Asia, 75 from the Middle East and North Africa and 11 from Sub-Saharan Africa.
The proposed new 2% tax would raise $72.3 billion in North America, $60,300 in South and Southeast Asian countries and $42,300 in Europe.
The European Tax Observatory is seriously mistaken about the minimum corporate tax rate of 15%. This is the result of the international agreement reached in 2021 within the framework of negotiations led by the OECD.
In practice, it is expected to report less than 5% of corporate tax revenue globally due to various implementation failures, while if actual enforcement had been 15% it would have been 9%.
His suggestion is to introduce a minimum corporate tax rate of 25% and abolish exemption rules that promote tax competition, so that around $250 billion can currently be raised.
Ultimately, you add the product of the tax rate on billionaires and that upward revision in the tax rate on the profits of multinational corporations. About half a billion dollars could be generated annually. This represents an amount equivalent to the additional money that developing countries need to meet the challenges of climate change.
Source: La Neta Neta
Karen Clayton is a seasoned journalist and author at The Nation Update, with a focus on world news and current events. She has a background in international relations, which gives her a deep understanding of the political, economic and social factors that shape the global landscape. She writes about a wide range of topics, including conflicts, political upheavals, and economic trends, as well as humanitarian crisis and human rights issues.
