JOHANNESBURG—A plan to raise taxes on the wealth of the world’s 3,000 billionaires will be top of the agenda at the next meeting of the G20 group of major economies in Brazil on Nov. 18.
America’s super-rich are key targets of the “global wealth tax,” with financial experts accusing them of using loopholes to avoid paying their fair share of taxes.
Zucman’s study showed that the world’s billionaires are paying an average of just 0.3 percent tax on their wealth.
“The super-rich are using loopholes and legitimate avoidance measures to escape paying their fair share in taxes,” Zucman told The Epoch Times.
“I would explain my plan as a top-up to income tax, designed so billionaires pay a tax bill worth at least 2 percent of their wealth every year.”
“I’m sure you’d agree 2 percent is very little when one considers what normal people are paying in taxes around the world,” Zucman said.
In late July, G20 finance ministers announced they would cooperate to make the super-rich pay their taxes, but they didn’t agree on a more substantial deal.
The African Union and some European Union countries, most notably France and Spain, are leading the charge for a global wealth tax on billionaires, two-thirds of which reside in the United States and China.
According to Forbes, the United States is home to 813 billionaires collectively worth $5.7 trillion.
These include Musk; Amazon CEO Jeff Bezos with $194 billion; Facebook creator Mark Zuckerberg with $177 billion; investor Warren Buffett with $133 billion, and Microsoft chief Bill Gates with $128 billion.
Forbes said 14 of the top 20 richest people in the world are U.S. citizens, including eight of the top 10.
In 2021, nonprofit media organization ProPublica obtained what it described as a “vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years.”
The article said the tax records demolished the “cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most.
The IRS records show that the wealthiest can—perfectly legally—pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow by each year.
South African tax expert Johan du Plessis told The Epoch Times: “What’s happening in America is generally what’s happening around the world.
“The middle classes are overtaxed and the wealthy are undertaxed. A typical middle-class household simply won’t build wealth, because more earnings mean higher taxes.”
However, super-rich individuals could afford to pay the “world’s best” tax consultants to help them avoid paying progressive taxes on income and profit, Du Plessis said.
“In many countries, the rich become richer because the value of their assets, like property, increases,” he said.
“The law, including in South Africa and the United States and many other countries, says those gains are not taxable unless and until they’re sold.”
In 2023, the annual income of the average U.S. household was $80,610, according to the U.S. Census Bureau’s Current Population Survey. This was taxed at a rate of 22 percent for individual filers and 12 percent for married couples.
In 2024, U.S. couples are taxed 37 percent on earnings above $731,201.
According to Forbes, those 25 individuals saw their worth rise by a collective $401 billion from 2014 to 2018.
The IRS data showed they paid a total of $13.6 billion in federal income taxes in those five years.
Du Plessis said tax laws everywhere “punish” the middle classes and reward the super-rich.
“Get a higher salary and you pay more tax. In the case of millionaires and billionaires, make more profit and you pay less tax in reality,” he said.
President Joe Biden has often stated during his presidency that the wealthiest Americans should pay more tax.
A more progressive tax system was central to Biden’s economic strategy for reelection in November before he was replaced in July by Vice President Kamala Harris as the Democratic presidential candidate.
Almost 60 percent of the 800 respondents said they would back marginal rates on income tax above $100 million that were higher than the current top rate of 37 percent.
The poll, commissioned by Patriotic Millionaires, a group of high-net-worth Americans and businesses concerned about rising levels of inequality in the world’s largest economy, found more than 60 percent of those surveyed viewed rapidly expanding inequality as a threat to democracy.
But at the G20 meeting in July, U.S. Treasury Secretary Janet Yellen said Washington was opposed to a global agreement on taxing billionaires.
“We think that all countries should make sure that their taxation systems are fair and progressive,” she told reporters.
Since Harris replaced Biden, she’s been “far less vocal” on the issue of a wealth tax, the Tax Foundation said.
“On a gross basis, we estimate that Vice President Harris’s proposals would increase taxes by about $4.1 trillion from 2025 to 2034,” the foundation’s analysis said.
It also warned that her proposed tax changes would reduce long-term gross domestic product by 2 percent, the capital stock by 3 percent, wages by 1.2 percent, and employment by about 786,000 full-time jobs.
“We find the tax policies would raise top tax rates on corporate and individual income to among the highest in the developed world, slowing economic growth and reducing competitiveness,” the foundation’s analysis said.
“The tax credits and other carveouts would complicate the tax code, run more spending through the IRS, and, together with various price controls, fail to improve affordability challenges in housing and other sectors.”
It said the net effect of Harris’s tax increases could increase deficits by roughly $2.6 trillion over the next decade.
Republican presidential nominee and former President Donald Trump is vehemently opposed to tax increases on the rich, according to a new study by the U.S. Institute on Taxation and Economic Policy (ITEP).
The wealthiest 1 percent would see an average tax decrease of more than $36,000 while the bulk of lower earners in the population would see tax increases of around $1,500, according to Trump’s tax plans, ITEP federal policy director Steve Wamhoff said at a recent event.
Other countries significantly impacted by higher taxes on the super-rich include China, the second-largest economy in the world and the United States’ main geopolitical rival.
Forbes said China has the second most billionaires, with 406 worth $1.3 trillion.
India, the world’s most populous country, has 200 billionaires worth a collective $954 billion.
Germany has the fourth-highest number of billionaires, with 132, and Russia has 120.
China, India, and Russia have thus far not indicated where they stand in terms of a global agreement to tax billionaires.
