It is estimated that the global billionaire tax would generate $250 billion annually: Reports

On Monday, the EU Tax Observatory stated that governments ought to strike a new front in the global campaign against tax evasion by imposing a worldwide minimum tax on billionaires, which may generate $250 billion yearly.

If taxed, the amount would only make up 2% of the approximately $13 trillion in assets held by the 2,700 billionaires worldwide, according to the research team based at the Paris School of Economics.

According to the organization’s 2024 Global Tax Evasion Report, billionaires can park their riches in shell firms that shield them from income tax. Thus, their effective personal tax is frequently significantly lower than taxpayers with more modest means.

“In our view, this is difficult to justify because it risks undermining the sustainability of tax systems and the social acceptability of taxation,” said the Observatory’s director, Gabriel Zucman.

According to estimates from the Observatory, the personal tax on billionaires is as low as nil in otherwise high-tax France and close to 0.5% in the United States.

Growing calls for the wealthiest individuals to pay a larger share of taxes are fueled by growing wealth inequality in many nations, as public finances are straining to meet the demands of an aging population, massive funding requirements for the climate transition, and legacy COVID debt.

The 2024 budget proposed by U.S. President Joe Biden included a 25% minimum tax on the wealthiest 0.01% of the population, but politicians in Washington have since abandoned the idea due to concerns about impending funding deadlines and the possibility of a government shutdown.

While a concerted global effort to tax billionaires would take years, the Observatory cited instances where governments have successfully ended bank secrecy and limited the ability of multinational corporations to transfer revenues to low-tax jurisdictions.

The Observatory projected that since the automatic sharing of account information was implemented in 2018, the amount of wealth stored in offshore tax havens has decreased by a factor of three.