Finance ministers from the G20 nations agreed on Friday to strive towards effectively taxing the super-rich, marking a significant step forward in addressing global wealth disparities. The joint ministerial declaration, issued after a two-day meeting in Rio de Janeiro, emphasized the need for cooperative engagement to ensure that ultra-high-net-worth individuals are effectively taxed, while respecting tax sovereignty.
Brazil, which currently holds the G20 presidency, has made a proposal to impose a 2% minimum tax on billionaires a top priority ahead of the G20 summit in November. While the final declaration did not specify a global tax rate, Brazilian Finance Minister Fernando Haddad hailed it as a 'significant step forward.'
The proposal has divided G20 nations, with countries like France, Spain, and South Africa expressing support, while the U.S. has voiced opposition. U.S. Treasury Secretary Janet Yellen stated that tax policy is difficult to coordinate globally and that the U.S. does not see a need for a global agreement.
Economist Rogério Studart highlighted the importance of collective action, noting that when action is done collectively, everyone wins. The richest 1% have amassed $42 trillion in new wealth over the past decade, nearly 36 times more than the entire bottom 50% of the world’s population, according to an Oxfam analysis.
A report by Gabriel Zucman, commissioned by Brazil, suggests that a 2% tax on billionaires could raise $200 billion to $250 billion per year globally, which could fund public services such as education and health care, as well as the fight against climate change. Zucman celebrated the outcome of the finance ministers’ meeting, calling it an important step in the right direction.
NGOs also welcomed the declaration, encouraging further action at the G20 summit in November. Greenpeace Brazil emphasized the need for the regular taxpayer not to bear the cost of climate change alone, while Oxfam International called for a new global standard that taxes the ultra-rich at a rate high enough to close the wealth gap.
Brazil has put inequality, poverty, and hunger at the heart of its G20 presidency. The country is also pushing for changes in global governance institutions and advocating for a sustainable energy transition. On the sidelines of the discussions around taxation, Brazil and the U.S. announced the launch of a climate partnership to address environmental challenges and strengthen the region’s green economy.
The agreement to discuss higher taxes for the rich was reached despite objections from Germany and the U.S. Oxfam International hailed the meeting as 'serious global progress,' noting that for the first time in history, the world’s largest economies have agreed to cooperate to tax the ultra-rich.
Zucman emphasized the historic nature of the agreement and called for further steps to implement a coordinated minimum tax on the super-rich. The Independent Commission for the Reform of International Corporate Taxation (ICRICT) applauded the agreement and called on the G20 to support work on this at the Framework Convention on International Tax Cooperation currently being negotiated at the United Nations.
Comments (1)