A study suggested that a minimal additional tax on the world’s billionaires could potentially collect up to $250 billion annually.
On the 25th (local time), the Financial Times (FT) reported that participants in a study commissioned by the Group of 20 (G20) indicated it is technically feasible to collect such an amount in taxes from billionaires, even if all countries don’t participate.
French economist Gabriel Zucman, who co-authored the study report, stated that it is necessary to collect coordinated taxes from the world’s 3,000 billionaires.
The report suggests that collecting taxes from these individuals would amount to taxing 0.3% of their assets.
Those who already pay more than 2% in income tax are excluded from the target group.
G20 finance ministers are expected to discuss this issue next month.
The FT reported that South Africa, Spain, France, and Germany support tax increases on the wealthy, but U.S. Treasury Secretary Janet Yellen opposed the idea last month.
Zucman, who is currently an economics professor at UC Berkeley and Paris School of Economics in France, criticized in an interview with the FT that “the super-rich shouldn’t pay less taxes than teachers or firefighters.”
He emphasized, “Charging 2% tax is not high.”
The report proposes an annual 2% tax on individuals with assets exceeding $1 billion.
This could potentially collect $200 billion to $250 billion annually.
The report also explains that an additional $100 billion to $140 billion could be collected by imposing taxes on asset holders with more than $100 million.
Zucman admitted that there are several obstacles, even though conditions for taxation have improved over the past 15 years with the gradual repeal of bank secrecy laws.
These challenges include the difficulty of accurately determining the exact value of wealthy individuals’ assets and the potential for some countries to refuse to tax the wealthy.
He also pointed out the need for a new system for countries to exchange information about wealthy individuals.
Zucman stated that this report signifies “the start of a discussion” and that while a global billionaire tax could succeed, political decisions are currently needed.
