G20 Finance Ministers Convene in Rio de Janeiro to Debate Super-Rich Global Tax

In a significant move during the Group of 20 meeting, Brazil proposed a tax on individuals with over $1 billion in assets, suggesting a 2% income tax on their wealth. Finance Minister Fernando Haddad confirmed that the final declaration would reference this proposal, although he did not specify the exact wording. He emphasized the importance of maintaining the proposal's relevance even after Brazil's presidency ends, indicating a broader process involving academia and international organizations like the OECD and U.N. Despite Brazil's initiative, U.S. Treasury Secretary Janet Yellen expressed opposition, stating that global tax policy coordination is challenging and unnecessary. While she affirmed the U.S. support for progressive taxation, she dismissed the idea of negotiating a global agreement on billionaire taxation. This divergence highlights the complexities of international tax reform efforts. Economist Bruno Carazza noted that a global tax on billionaires is essential to reduce the appeal of tax havens. A report by French economist Gabriel Zucman revealed that billionaires currently pay only 0.3% of their wealth in taxes. Implementing a 2% tax could generate between $200 billion and $250 billion annually, potentially funding vital public services and climate initiatives. Brazilian President Luiz Inácio Lula da Silva reinforced the need for increased taxation on the wealthy, criticizing the regressive nature of current tax systems. He pointed out the stark wealth disparity, with the richest 1% accumulating $42 trillion over the past decade, compared to the bottom 50%. Lula's remarks came as he announced plans for a global alliance aimed at combating hunger and poverty, with operational support from the U.N. Food and Agriculture Organization.