G20 Finance Ministers Commit to Working on Effective Taxation of the Super-Rich
RIO DE JANEIRO — Finance ministers from major rich and developing countries agreed Friday to work to effectively tax the super-rich, according to a joint ministerial statement.
“With full respect for fiscal sovereignty, we will seek to cooperate to ensure that very high-income individuals are effectively taxed,” the statement said after the two-day meeting in Rio de Janeiro.
Brazil has made the proposal to impose a minimum 2% tax on billionaires a top priority of its presidency of the Group of 20, ahead of the November 18-19 summit in Rio.
Although the final declaration stopped short of agreeing on a specific global tax, Brazilian Finance Minister Fernando Haddad nonetheless called it a “significant step forward.”
“We were always optimistic about this result, but it really exceeded our initial expectations,” Haddad told reporters.
Brazil’s proposal to tax billionaires has divided the G20 countries, with France, Spain and South Africa expressing support, while the United States is opposed.
“Tax policy is very difficult to coordinate globally, and we don’t see the need or really think it’s desirable to try to negotiate a global agreement on this,” U.S. Treasury Secretary Janet Yellen told reporters on Thursday.
According to a report by Gabriel Zucman, commissioned by Brazil, billionaires currently pay the equivalent of 0.3% of their wealth in taxes. A 2% tax would raise between $200 billion and $250 billion a year globally from about 3,000 people, money that could fund public services such as education and health, as well as the fight against climate change, the report said.
Brazil has placed inequality, poverty and hunger at the heart of its G20 presidency. Luiz Inacio Lula da Silva defended the need for higher taxes on the world’s richest on Wednesday in Rio when He unveiled plans for a global alliance against hunger and poverty.
Brazil is also pushing for changes to global governance institutions and advocating for a sustainable energy transition.
