Finance ministers from major rich and developing countries agreed Friday to work to effectively tax the super-rich, according to a joint ministerial statement.
“With full respect for fiscal sovereignty, we will seek to cooperate to ensure that high net worth individuals are adequately taxed,” said the statement released after the two-day meeting in Rio de Janeiro.
Brazil has proposed imposing a 2% minimum tax on billionaires as a top priority of its presidency of the Group of 20, ahead of the November 18-19 summit in Rio.
Although the final declaration falls short of agreement on a specific global tax, Brazilian Finance Minister Fernando Haddad nonetheless called it an “important step forward.”
“We were always optimistic about this result, but it really exceeded our initial expectations,” Haddad told reporters.
Brazil’s proposal to tax billionaires, however, has divided the G20 countries, with France, Spain and South Africa expressing support for it, while the United States opposed it.
“Tax policy is very difficult to coordinate globally, and we don’t see the need or really think it’s desirable to try to negotiate a global agreement on it,” Treasury Secretary Janet Yellen told reporters on Thursday.
Billionaires currently pay the equivalent of 0.3% of their wealth in taxes, according to a report by Gabriel Zucman, commissioned by Brazil. A 2% tax would raise $200 billion to $250 billion a year globally from about 3,000 individuals, money that could fund public services such as education and health care, as well as combating climate change, the report suggests.
Brazil has put inequality, poverty and hunger at the heart of its G20 presidency. President Luiz Inácio Lula da Silva defended the need to raise taxes on the world’s richest on Wednesday in Rio as he unveiled plans for a global alliance against hunger and poverty.
Brazil is also pushing for changes in global governance institutions and advocating for a sustainable energy transition.