G20 Discusses Global Tax on Super-Rich 07/26 06:23

   Finance ministers from leading rich and developing nations gathered in Rio 
de Janeiro on Thursday for a two-day meeting to discuss a global tax on the 
super-rich, a top priority for Brazil, which holds the presidency.

   RIO DE JANEIRO (AP) -- Finance ministers from leading rich and developing 
nations gathered in Rio de Janeiro on Thursday for a two-day meeting to discuss 
a global tax on the super-rich, a top priority for Brazil, which holds the 
presidency.

   According to the proposal before the Group of 20, individuals with over $1 
billion in total assets would be required to pay the equivalent of 2% of their 
wealth in income tax.

   Brazil's Finance Minister Fernando Haddad told reporters that the final 
declaration will mention a proposal to tax the super-rich, but he didn't detail 
wording or whether it will specifically cite the 2% proposition.

   "Against the skepticism expressed by everyone since the beginning of the 
year, we have taken a first step," Haddad said, adding that ministers agreed it 
was necessary to include mention of the proposal so that it maintains its 
centrality after Brazil leaves the presidency.

   "What has been initiated today is a broader process that will require the 
participation of academia, scholars and international organizations with 
experience in the subject, such as the OECD and the U.N.," Haddad added.

   France, Spain and South Africa -- which will chair the G20 in 2025 -- had 
expressed support, an official from the Brazilian Ministry of Finance told 
journalists last week. But U.S. Treasury Secretary Janet Yellen reiterated at a 
news conference Thursday that the U.S. does not support the initiative.

   "Tax policy is very difficult to coordinate globally, and we don't see a 
need or really think it's desirable to try to negotiate a global agreement on 
that," Yellen said, although she emphasized the U.S. is "strongly supportive of 
progressive taxation."

   An agreement on a global tax on billionaires is necessary to diminish the 
attractiveness of tax havens, said economist Bruno Carazza, a professor at the 
Dom Cabral Foundation, a business school.

   Billionaires currently pay the equivalent of 0.3% of their wealth in taxes, 
according to a report from French economist Gabriel Zucman commissioned by 
Brazil. The report said a 2% tax would raise $200 billion to $250 billion per 
year globally from about 3,000 individuals, money that could fund public 
services such as education and health care as well as the fight against climate 
change.

   The richest 1% have amassed $42 trillion in new wealth over the past decade, 
nearly 36 times more than the entire bottom 50% of the world's population, 
according to an Oxfam analysis released Thursday ahead of the finance 
ministers' meeting.

   Brazil's President Luiz Incio Lula da Silva defended the need for increased 
taxation of the world's richest in Rio on Wednesday when he unveiled plans for 
a global alliance against hunger and poverty.

   "At the top of the pyramid, tax systems stop being progressive and become 
regressive. The super-rich pay proportionally much less tax than the working 
class," Lula said.

   "Some individuals control more resources than entire countries. Others have 
their own space programs," he added, in an apparent jab at Elon Musk, who owns 
SpaceX, and Jeff Bezos, who founded the space company Blue Origin.

   The global alliance against hunger and poverty aims to implement a mechanism 
to mobilize funds and knowledge to support the expansion of policies and 
programs to combat inequality and poverty, according to a statement from 
Brazil's G20 press office on Tuesday. It would be managed by a secretariat 
located at the U.N. Food and Agriculture Organization headquarters in Rome and 
Brasilia until 2030, with half of its costs covered by Brazil, Lula said in his 
speech.