G20 meeting faces divergence over global billionaire tax

USA On Thursday he opposed the creation of a global tax on large fortunes, but Brazil welcomed the meeting of finance ministers of the G20 in Rio de Janeiro marks “the first step” to materialize the ambitious idea.

The proposal to tax the super-rich is being pushed at the G20 by Brazilian President Luiz Inácio Lula da Silva, who this year presides over the bloc of the 20 largest global economies.

US Treasury Secretary Janet Yellen said at a press conference in Rio during the G20 meetings that the United States opposes a coordinated tax.

“We do not see the need nor do we believe it is desirable to try to negotiate a global agreement on this issue,” Yellen said.

“The United States strongly supports a progressive tax system that ensures that very wealthy individuals with high incomes pay their fair share,” he added.

But even though there is no consensus on that point, Brazilian Finance Minister Fernando Haddad welcomed the discussions and said the statement to be issued on Friday represents a “first step recognized by the 20 members of the G20.”

The final text will include “the Brazilian proposal to start thinking about international taxation not only from the point of view of companies but also from that of super-rich individuals,” Haddad told reporters after the first day of meetings on Thursday. “It is a conquest of a moral nature”Haddad stressed.

“The early stages”

A participant in the meetings confirmed to AFP that currently “There is no consensus to create a global tax on billionaires’ capital. But the goal is to “put the issue on the agenda and discuss the first stages.”the source added.

The proposal to promote a global tax on the richest from the G20 emerged at the beginning of the year and gradually gained the support of several countries such as France, Spain and South Africa.

French economist Gabriel Zucman estimates that the tax rate paid by billionaires is just 0.3% of their wealth. In a recent report prepared at the request of Brazil, Zucman proposed creating a tax on the 2% on the fortunes of some 3,000 billionaires. But it is not only the United States that rejects this proposal.

The German Ministry of Finance, on the eve of the G20, considered “not very relevant”” the idea.

Inequalities have continued to increase in recent years, according to a study by the NGO Oxfam published on Thursday: 1% The richest man in the world saw his wealth grow by more than 40 billion dollars, but his taxation is “historically” low.

Geopolitical situation

In addition to an international tax system, the meeting of ministers prior to the summit of heads of state and government on 18 and 19 November – also in Rio – will discuss the global economic situation, financing of the climate transition and debt.

International divisions over the wars in Ukraine and Gaza have made the G20 joint statements a sensitive issue.

During the last meeting of finance ministers in Sao Paulo in February, these issues led to a “impasse”. This time, the solution devised by Brazil is to issue three texts, according to Brazilian authorities.

On the one hand, one dedicated exclusively to the tax issue. On the other, a more extensive final statement and, finally, a “statement” published separately by the Brazilian presidency to make clear the references to geopolitical crises.

This model was already put into practice this week. The Brazilian G20 presidency issued a statement on Wednesday “statement” stating that some G20 members “expressed their views” on the situation in Ukraine and Gaza during the debates of the Global Alliance against Hunger and Poverty.

Some countries see the G20 as a relevant forum to discuss these issues, while others think the opposite. Founded in 1999, the G20 brings together most of the world’s major economies, as well as the European Union and the African Union.