Meeting in Rio de Janeiro, the heads of state and government of the G20, the main forum for international economic cooperation, endorsed a proposal for progressive taxation, which calls for the effective taxation of individuals deemed super-rich. The proposal is included in the summit’s final communiqué, released on Monday afternoon (Nov. 18), the first day of the annual meeting.
“With full respect for tax sovereignty, we will seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed. Cooperation may include exchanging best practices, fostering debates on tax principles, and developing anti-avoidance mechanisms, such as addressing potentially harmful tax practices. We look forward to continuing discussions on these issues within the G20 and other relevant forums, drawing on the technical contributions of international organizations, universities, and experts,” says the document, whose final content was approved by consensus.
Estimates from the Brazilian Ministry of Finance suggest that a 2 percent tax on the wealth of the super-rich could generate $250 billion annually, to be invested in combating inequality and funding the ecological transition. This group of ultra-wealthy individuals comprises around 3,000 people, whose combined assets total approximately $15 trillion—more than the GDP of most countries. However, the G20 text does not propose a specific tax rate.
The final G20 charter also advocates for progressive taxation, where individuals with greater resources are taxed at higher rates. This is presented as one of the “key tools to reduce internal inequalities, strengthen fiscal sustainability, promote budget consolidation, foster strong, sustainable, balanced, and inclusive growth, and facilitate the achievement of the SDGs [Sustainable Development Goals].”
Source: Agência Brasil