Establishing a global minimum tax on billionaires could raise $250 billion per year.
France would like new impetus to be given to the establishment of a global minimum tax on billionairesafter the introduction of a minimum corporate tax rate of 15% which is due to take effect this year, the French Minister of Finance said on Wednesday, Bruno Le Maire. “Today, you have the possibility for the richest people to avoid paying the same amount of tax on their income as other people who are less wealthy. We want to avoid this tax optimization”declared Bruno Le Maire on the sidelines of a meeting of finance ministers of the G20 member countries organized in Sao Paulo.
The European Tax Observatory indicated in a study published in October that the introduction of a global minimum tax on billionaires could bring in 250 billion dollars per year. A sum which, if taken, would be equivalent to only 2% of the approximately 13,000 billion dollars of wealth held by the 2,700 billionaires around the world. Currently, the effective personal tax of billionaires is often much lower than that paid by lower-income taxpayersbecause they can invest their fortune in personal asset holding companies, or family holding companies, to avoid income tax, the group said.
“We want Europe to support this idea of minimum taxation of individuals as quickly as possible and France will be at the forefront on this subject,” said Bruno Le Maire. He added that it was logical to act against tax optimization at the international level, similar to what was achieved with the minimum corporate tax at the global level. An international agreement concluded in 2021 between 140 countries should limit the possibility for multinationals to reduce their taxes by recording their profits in low-tax countries, setting a global floor of 15% for corporate taxes starting this year.
Brazilian Finance Minister Fernando Haddad said ahead of the meeting that Brazil would use its G20 presidency to begin discussions on international measures to discourage billionaires from using tax havens.