Following a conference in Rio de Janeiro on Friday, finance officials from G20 countries agreed to work together to reduce the superrich’s taxation.
” With complete regard to income sovereignty, we will get to join jointly to ensure that ultra-high-net-worth individuals are successfully taxed”, the statement said.
” Wealth and income inequality is aggravated social threats and undermining economic growth and social cohesiveness,” it continued.
The two-day gathering in the Argentine city that may number a G20 summit in November was dominated by the delicate matter of cracking down on tax-dodging entrepreneurs.
Kristalina Georgieva, the head of the International Monetary Fund, praised the G20’s” income fairness” and said it was “welcome” to engage in taxing the ultrarich.
Who is behind the action?
Luiz Inacio Lula da Silva, president of Brazil and head of the gathering of the nation’s largest economies, has set the program as top priority this year.
Lula had hoped for a 2 % minimum tax on the wealthy elite, but the final declaration represents a step backward in a war-tight alliance among the member states.
billionaires now pay the equivalent of 0.3 % of their money in taxes, according to a report from European economist Gabriel Zucman, which Brazil commissioned.
A 2 % tax would raise between$ 200 billion ( €184 billion ) and$ 250 billion ( €230 billion ) a year globally from about 3, 000 individuals. According to the report, the cash could be used to pay for both the fight against climate change and public service like that of education and health maintenance.
G20 divided on the issue
The United States and Germany, but, rejected the need for a global partnership to tax entrepreneurs, an program supported by France, Spain, South Africa, Colombia and the African Union.
Brazilian Finance Minister Fernando Haddad described the ultimate declaration as a” considerable step forward,” despite the fact that it falls short of announcing a certain global tax.
” We were always cheerful about this outcome, but it really exceeded our first expectations”, Haddad told writers.
He argued that “from a moral standpoint, it is important that the twenty richest governments consider that we have a problem, which is progressive taxation of the bad and not the wealthy.”
