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https://www.theguardian.com/commentisfree/article/2024/may/02/brazil-global-tax-billionaires-perfect-sense>
"The idea is simple. There are about 3,000 billionaires in the world and in
recent years they have been getting richer and richer. Demands on hard-up
governments from ageing populations and the drive to achieve net zero are
growing all the time. Rather than expect voters already struggling to make ends
meet to pay more, how about a wealth tax on Jeff Bezos, Elon Musk and their
like?
This is an idea that has obvious attractions. As Joe Biden has pointed out, US
billionaires make their money in ways that are often taxed at lower rates than
the ordinary wage income of American workers. Overwhelmingly, their wealth
comes from the rising value of their assets, and they use tax loopholes and
legal accounting moves to minimise the tax they pay. Wealthy Americans pay an
average tax rate on their incomes of just 8%. Biden thinks they should be
paying a minimum of 25%.
The Brazilian government has an even more ambitious proposal – for an annual
global tax levied at 2% on the wealth of the world’s billionaires. The French
economist Gabriel Zucman has been asked to draw up a detailed plan for how a
billionaire wealth tax would work ready for a meeting of G20 finance ministers
in July.
Pre-pandemic, Zucman’s idea of an annual 2% tax on the wealth of billionaires
would probably have been rejected out of hand, but Covid-19 and the energy
shock imparted by Russia’s invasion of Ukraine have left governments in
developed and developing countries desperately short of cash. The very poorest
countries – who have suffered most over the past five years – don’t have the
money to pay for much-needed investment in health or education, let alone
tackling global heating.
The number of billionaires almost tripled in the 2010s and has continued to
rise over the past four years, because the value of their assets – mostly
shares and property – has been swelled by the policies pursued by central banks
during the health emergency. Ultra-low interest rates and the bond-buying
programmes known as quantitative easing meant money was cheap and plentiful.
Stock market and property booms resulted, and even though people on much more
modest incomes have also seen the value of their homes and pension plans
increase, those with high levels of wealth to begin with were the biggest
gainers. Even a 2% wealth tax would leave the rich much better off than they
were a decade ago.
There is solid public support for a billionaire tax, which is hardly a
surprise. Generally speaking, people want more to be spent on public services
and would prefer the better off to foot the bill. The cost of living crisis has
made people much more sensitive about the growing wealth gap between the
super-rich and the rest. As Zucman told me when I spoke to him in Washington
last month, not many people favour a system where those with the greatest
ability to pay taxes are actually paying the least."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
