FRENCH economist Gabriel Zucman introduced a US$250-billion-a-year thought to prime coverage makers from the world’s greatest economies on Thursday: slap a world wealth tax on the super-rich.
Zucman, a 37-year-old ex-protege of famend economist and inequality professional Thomas Piketty, was invited to stipulate his analysis on tax evasion by the ultra-wealthy at a gathering of finance ministers from the Group of 20 nations, which is working to deal with the problem.
In an interview with AFP on the sidelines of the gathering in Sao Paulo, the UC Berkeley and Paris School of Economics professor mentioned how billionaires like Elon Musk and Jeff Bezos get away with paying zero earnings tax, change that, and why world leaders have to do it quick to avoid wasting democracy.
What is the argument for minimal tax on super-rich?
“There is a rising physique of proof that at the moment’s tax methods, as a substitute of being progressive, are typically sharply regressive on the prime of the distribution… The explosion of maximum wealth is without doubt one of the defining options of the world economic system. It’s actually in our face. And the truth that these individuals (billionaires) pay little or no in tax has turn into increasingly more apparent through the years.
“One concrete proposal is billionaires ought to pay every year, in earnings tax, the equal of a minimum of two % of their wealth… Unlike earnings, wealth could be very well-defined.
“There are about 3,000 US-dollar-billionaires globally… That would generate about US$250 billion in extra tax income worldwide.
“According to the best estimates that we have, developing countries need an additional US$500 billion to face the challenges of climate change. So we can get half of that with just this minimum tax on billionaires.”
What was the response at G20?
“Today is basically the primary time that there was a dialogue like this in a discussion board just like the G20. And I used to be struck by the truth that many international locations expressed help for the view that sure, we should always have worldwide agreements about taxing the super-rich, growing tax progressivity, preventing inequality. I feel it’s a really optimistic improvement.
“It’s the very beginning of the conversation. There has to be an inclusive discussion and more studies to flesh out the details.”
Billionaires will hate it. What’s your message to them?
“It’s good in the event that they hate it. Because it exhibits that it will truly make a distinction. This is definitely the one tax that’s going to be very arduous for them to keep away from. The earnings tax could be very simple to keep away from. The inheritance or property tax, they’re additionally superb at avoiding it. This is one thing that shall be very arduous for them to keep away from. So sure, they’re going to battle.
“But I feel what I concern extra is the implications of inaction. I feel it’s way more dangerous to proceed (the present pattern) of rising focus of wealth, of tax injustice.
“The inequalities we have today… are unlikely to be very sustainable. They are corrosive for democracy.” AFP