Global Tax on Billionaires Could Raise $250 Billion, New Report Says
Governments around the world should engage in a coordinated effort to prevent tax evasion and create a global minimum tax on billionaires that could raise $250 billion annually, according to the EU Tax Observatory.
The new tax would amount to 2% of the nearly $13 trillion controlled by about 2,700 global billionaires but would bring in more tax revenue than is currently generated from the world's wealthiest, the group said Monday in its 2024 Global Tax Evasion Report.
Taxes on billionaires are often lower than those of general taxpayers, due to billionaires having access to resources that allow them to place their money in shell companies that shield them from income tax, the research group said.
The EU Tax Observatory, which is hosted at the Paris School of Economics, said that personal taxes on billionaires are estimated to be close to 0.5% in the United States and as low as 0% in France.
Efforts to increase taxes on billionaires have been growing, with U.S. President Joe Biden including a minimum 25% tax on the wealthiest 0.01% in his 2024 budget proposal. However, the plan is not expected to pass Congress.
While difficult, coordinated strategies toward greater taxation have happened. A 2021 agreement between 140 countries set a global 15% floor on corporate taxation, aiming to limit the ability of multinational companies to reduce their taxes by diverting profits to low-tax countries.
"Something that many people thought would be impossible, now we know can actually be done," EU Tax Observatory Director Gabriel Zucman told journalists. "The logical next step is to apply that logic to billionaires, and not only to multinational companies."
According to the report, instituting a minimum corporate tax effectively ended countries' competition for lower tax rates, but it said loopholes still remain for companies to reduce their tax bills.
Some information in this report came from Reuters.