Governments should open a new front in the international clampdown on tax evasion with a global minimum tax on billionaires, which could raise $250 billion annually, the EU Tax Observatory said on Monday.

If levied, the sum would be equivalent to only 2% of the nearly $13 trillion in wealth owned by the 2,700 billionaires globally, the research group hosted at the Paris School of Economics said.

Currently billionaires’ effective personal tax is often far less than what other taxpayers of more modest means pay because they can park wealth in shell companies sheltering them from income tax, the group said in its 2024 Global Tax Evasion Report.

“In our view, this is difficult to justify because it risks to undermine the sustainability of tax systems and the social acceptability of taxation,” the observatory’s director Gabriel Zucman told journalists.

Billionaires’ personal tax in the United States is estimated to be close to 0.5% and as low as zero in otherwise high-tax France, the Observatory estimated.

  • torknorggren@lemm.ee
    46·
    1 year ago

    I love the principle, but I don’t think it is even legal in the US. The constitution only allows for income tax, and I don’t see that ever changing.

    • BraveSirZaphod@kbin.social
      34·
      1 year ago

      This article is discussing an income tax, not a wealth tax, which you correctly state would not be legal at a federal level without an amendment.

      It’s hard to really interpret what the article is actually talking about though due to a lack of specifics. Billionaires do pay quite a lot of taxes (the top 1% of Americans pay 43% of all income tax revenue, for instance), and also pay a lot in consumption taxes, but due to the way their income is structured, a lot falls under capital gains and other taxes rather than standard tax on salary. Gains in assets contribute to net worth, but (correctly) are not taxed until those gains are actually realized. There are some loopholes in how those assets can be used as collateral for loans, but since those do still have to be paid back with interest, they do quite literally not represent net income. There’s a difference between aiming to close tax loopholes and simply trying to get more revenue from billionaires. Neither is necessarily a bad aim, but they’re not exactly the same thing. There’s also an important distinction to be made between taxing billionaires because they’re a useful source of revenue for important government programs and taxing them because you just think they’re icky and shouldn’t exist.