Tax on millionaires is essential to face global crisis

Washington. Joseph Stiglitz, Nobel Prize winner in Economics, along with former Colombian Finance Minister José Antonio Ocampo and several other international experts endorsed the Brazilian government’s proposals for a tax on the planet’s billionaires, but in private meetings in this city officials Brazilians warn that this initiative requires support from other governments.

“What Brazil is doing is very important. “In the last 40 years, the neoliberal agenda said that it was not reasonable to tax anyone and that if only the tax rate were lowered, the economic growth unleashed would be so great that it would benefit everyone,” Stiglitz commented this week. “That didn’t happen. “This is why we have to tax the super-rich.”

The famous economist was responding to statements by Fernando Haddad, Brazil’s Finance Minister, and Bruno Le Maire, his French counterpart, saying that the international community has to do more to make the world’s richest companies and individuals pay their dues. tax fair, an issue that arose within the framework of the annual meetings of the International Monetary Fund (IMF) and World Bank here this week.

Difficult to collect from tycoons

The director of the IMF, Kristalina Georgieva, had already shown her support for increasing taxes on the rich and large companies.

Responding to a question from La Jornada about a global wealth tax, Rodrigo Valdés, head of the IMF’s Western Hemisphere Department, said more countries have eliminated taxes on the rich than have implemented them. “Why is that?” he asked rhetorically.

“Because people move. It is not so easy to raise it. Therefore, the next question is whether it is possible to achieve a global tax in all jurisdictions to address all the very urgent issues.”

Valdés concluded that “this route, although promising, does not have great possibilities, so it is better to work on what can be achieved.” He suggested taxes on inheritances and more on businesses.

However, Brazil is proposing that the G-20 at its summit in July of this year endorse an agreement to tax the wealth of the world’s richest, Haddad said.

Tax us, the super-rich!

Extreme wealth concentration is destabilizing democracies the world over, so the Patriotic Millionaires projected our message onto institutions the G20 Finance Ministers can’t ignore: the World Bank and the IMF in D.C.

We’d be #proudtopaymore pic.twitter.com/gKj6w9B9pq

— Patriotic Millionaires (@PatrioticMills) April 17, 2024

In comments at a forum organized by the Independent Commission for the Reform of International Business Tax (ICRICT), Stiglitz said there is simply no way for the international community to address the crisis of inequality, climate change and the global health without raising more revenue.

“We need money. Where is the money? An increasingly large fraction of that money is in the hands of the super-rich.

“What President (Luiz Inácio) Lula (da Silva) is doing at the G-20 by presenting the issue of inequality is addressing the most fundamental issue facing our global society today,” he stressed.

Gabriel Zucman, a member of ICRICT, was invited by Lula to propose at a meeting in Brazil that the G-20 endorse a global tax on the wealth of the approximately 3 thousand people in the world who have at least one billion dollars in wealth. .

“These billionaires have a much lower effective tax rate than all other socioeconomic groups,” Zucman explained this week at a forum. “While some billionaires already pay the equivalent of 2 percent of their wealth each year in taxes, some pay zero.” Zucman added that for those billionaires who already pay that 2 percent, under this proposal they would no longer have to pay more, but he insisted that many of these mega-rich do not pay anywhere near that percentage. They would have to pay more to reach that 2 percent of their wealth.

Zucman, who has been commissioned by the G-20 to develop a more detailed plan on this tax to present at the meeting of this club of countries this summer, said his proposal would raise an additional $250 billion in revenue each year.

At the same forum, José Antonio Ocampo, Colombia’s former finance minister, said his country has a long tradition – dating back to the 1930s – of taxing not only income, but also wealth. The neoliberal reforms of the 1980s annulled those taxes and it is only in recent years that Colombia has again applied a wealth tax as a temporary measure, and Ocampo commented that “I hope that those reforms we made will make it permanent.”

Ocampo insisted that the global tax on the rich should not be limited to just the 3,000 billionaires, but for every rich individual. These proposals face challenges, among which, he commented, are tax havens, such as those in Panama, where the rich can hide their wealth, as well as competition between countries that results from efforts to attract companies through lower tax rates. .

In this context, the Brazilian proposals to reach an agreement on a wealth tax between different countries is key since it ensures that this income does not remain only in the richest countries.

Brazil’s delegation at last week’s IMF and World Bank meetings has been lobbying for such a wealth tax as another structural reform in the global financial system. In recent years, a Brazilian official noted, Barbados, Kenya and France are among the countries that have added their support to these proposals. But in private conversations, Brazilian officials indicated there is still not enough support for other countries.

Asked about contacts between Brazil and Mexico, an official cited the conversations between presidents Andrés Manuel López Obrador and Lula. “We hope there will be more support,” he added.

For his part, tax expert Zucman commented that what is needed is a significant number of countries and not necessarily a consensus, even among those in the G-20. He recalled that 140 nations supported, in 2021, a minimum tax of 15 percent on transnational companies. Today, although the United States has not approved this tax, there are already 35 countries that are applying the minimum global tax. “We don’t need all the countries before we move forward,” he repeated, asserting that the global tax on billionaires could start like this.