World leaders are floating the idea of levying a global tax on the world’s richest people — and America wants no part of it. U.S. Treasury Secretary Janet Yellen said the U.S. will not support discussions about a global wealth tax ahead of a meeting with leaders from the Group of 7 countries, The Wall Street Journal reported Monday.
“We believe in progressive taxation,” Yellen said. “But the notion of some common global arrangement for taxing billionaires with proceeds redistributed in some way — we’re not supportive of a process to try to achieve that. That’s something we can’t sign on to.”
Proposed Global Wealth Tax
The plan — which has been advanced by Brazil, France, Spain, Germany, and South Africa — would require billionaires to pay at least 2% of their total wealth in taxes each year. Finance ministers from the G7 countries, which includes the U.S., Canada, France, Germany, Italy, Japan, and the United Kingdom, are slated to meet in northern Italy next week.
Recent research by British NGO Oxfam found that the top 1% of earners in G20 countries made $18 trillion in income in 2022. The G20 is made up of 19 countries, as well as the European Union and the African Union.
The EU Tax Observatory, a Paris-based research laboratory, estimates that a 2% tax would raise close to $250 billion annually, coming from less than 3,000 individuals.
Comparisons and Challenges
The proposed wealth tax would mirror the global minimum corporate tax, which Yellen helped bring about, a deal proposed by the Organisation for Economic Co-operation and Development (OECD) and signed by more than 140 countries. The agreement imposes a minimum effective tax rate of 15% on corporate profits in the country where they operate. Facing pushback from Republicans, U.S. Congress has yet to pass legislation that would bring it into force.
Nine of the world’s 10 richest people, according to the Bloomberg Billionaires Index, reside in the U.S., including Amazon founder Jeff Bezos, Tesla and SpaceX CEO Elon Musk, and Meta founder Mark Zuckerberg.
