Global Push for Higher Taxes on the Super-Rich Gains Momentum

In a significant shift in global sentiment, calls for higher taxes on the super-rich are gaining traction, with even conservative governments joining the chorus. The G20, a group of the world’s largest economies, has recently agreed that more needs to be done to tax the global elite effectively. Italy, led by Giorgia Meloni’s right-wing administration, has taken a bold step by doubling the “flat tax” on foreign income from €100,000 to €200,000 (approximately £85,500-£171,000). This move comes as a response to growing protests against the country’s low tax rates for wealthy foreigners, which had previously attracted 1,186 rich individuals to adopt Italy as their tax residency.

Economy Minister Giancarlo Giorgetti stated that Italy now opposes the idea of countries competing with each other to offer “fiscal favours” to the wealthy. This decision aligns with the partial abolition of tax breaks for wealthy foreign residents in the UK, known as non-domiciled status, and the promise of an even tougher stance by Keir Starmer, the leader of the Labour Party, should they be elected.

The rhetoric from US President Joe Biden, who made attacking the super-wealthy a central theme of his re-election campaign before stepping aside for Kamala Harris, has also contributed to the growing support for a global wealth tax. Rebecca Gowland, executive director of Patriotic Millionaires UK, a pressure group campaigning for an end to extreme wealth, noted, “I don’t think I have seen such a big transformation in the narrative around the tax on wealth as I have in the last three years.”

The G20’s current host, Brazil, and its President, Luiz Inácio Lula da Silva, have been credited with putting a tax on wealth at the top of the group’s agenda. French economist Gabriel Zucman was invited to advise the G20 on how to tax the super-wealthy effectively. Zucman’s report revealed that billionaires currently pay an average of just 0.3% tax on their wealth, while their share of global wealth has increased from 3% to 14% between 1987 and 2024.

Zucman’s proposed plan, which he describes as a top-up to income tax, would ensure that billionaires pay an annual tax bill worth at least 2% of their wealth. This minimum tax could raise £200 billion to £250 billion a year from about 3,000 taxpayers globally, with an additional £100 billion to £140 billion generated by extending the tax to centimillionaires with assets of $100 million or more.

As the debate on taxing the super-rich intensifies, countries like Norway, Spain, and Switzerland are grappling with the potential consequences of higher wealth taxes. Some fear an exodus of wealthy individuals to low-tax jurisdictions outside the G20, such as Singapore and the United Arab Emirates. However, organizations like Oxfam argue that the G20 needs to resist this threat and cast a wider net to include centimillionaires in the tax plan.

Christian Hallum, a senior tax policy adviser at Oxfam, emphasized the need for a huge effort to tackle global poverty, stating, “While 2% is better than nothing, it is at the low end of our ambitions.” As the world watches the developments in the G20’s push for higher taxes on the super-rich, it remains to be seen how effective these measures will be in addressing the growing inequality and funding critical initiatives like the fight against climate change.