daniel chigunweThe US has dismissed it. Germany is sceptical. And France is suddenly facing an uncertain future that could threaten its own efforts to champion the idea.
French economist Gabriel Zucman last week detailed his plan to create a global minimum tax on billionaires, a centrepiece of Brazil’s yearlong Group of 20 nations presidency that is facing steep challenges in a tumultuous international climate dominated by contentious elections and two major wars.
Zucman’s proposal, commissioned by Brazil, calls for a 2 percent minimum tax that would hit about 3 000 of the world’s richest people, and is set for debate when G-20 finance ministers gather in Rio de Janeiro next month.
But while various governments have pitched proposals to soak the rich to shore up budgets and address inequality, building the consensus necessary to do so at the international level is already proving difficult.
The idea of a global tax on billionaires already split G-7 nations a month ago, after Germany expressed reservations and the Biden administration baulked at specific aspects of the plan mentioned in a draft communiqué.
G-20 finance chiefs, meanwhile, struggled to stay focused on economic affairs at their previous gathering in February, when Russia’s war in Ukraine and the Israel-Hamas conflict kept them from issuing a closing statement.
Since then, the success of nationalistic right-wing parties in European parliamentary elections has dealt potential blows to progressive economic ideas and the multilateral cooperation necessary to implement ideas like this one.
Looming elections in France and the US that could lead to congressional victories for Marine Le Pen’s far-right party and Donald Trump’s return to the White House may further complicate matters — and have begun to consume the focus of both Emmanuel Macron and Joe Biden.
But President Luiz Inacio Lula da Silva’s government is nevertheless pushing forward with an idea it sees as vital to planetary battles against poverty and climate change — the primary aims of Brazil’s first stint as the G-20’s leader.
The plan could raise as much as US$250 billion per year from the baseline 2 percent tax — measured in terms of wealth, not income — or even more at other rates Zucman considers, according to projections. It has already won the support of both wealthy and developing nations, including France, Spain and South Africa, which will assume the G-20 presidency from Brazil at the end of the year.
Zucman and top officials at Brazil’s finance ministry, meanwhile, insist that their efforts are meant to payoff over the long-term rather than immediately: As an example, they point to a years-long push to implement a 15 percent global minimum corporate tax that went into effect in January, with more than 140 countries on board. Like that levy, Brazil’s billionaire tax is meant to offer a global solution to a problem that many nations have been unable to solve on their own, according to Zucman, an assistant professor at the University of California Berkeley who made his name by figuring out where the wealthy hide their money. – Bloomberg
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