Billionaire Tax Proposal Could Raise $250 Billion Annually
Brazil-commissioned proposal set for debate at the G-20 finance ministers' meeting in Rio de Janeiro next month.
A new proposal to tax the world's 3,000 billionaires could generate up to $250 billion annually, according to a report by French economist Gabriel Zucman.[1]
Brazil-commissioned proposal set for debate at the G-20 finance ministers' meeting in Rio de Janeiro next month.
The proposal is inspired by the Organization for Economic Cooperation and Development’s (OECD) recently introduced 15% global corporate tax.
The study recommends a minimum annual tax of 2% on individuals with a net worth exceeding $1 billion, a significant increase from the current average tax rate of 0.3% for billionaires, though still below the global average income tax rate. Zucman suggests an additional levy to ensure billionaires contribute at least 2% of their wealth in taxes each year. The estimated tax revenue would be allocated to funding public services such as education, healthcare, and climate change mitigation.
Critics argue that the two countries with the largest number of billionaires, the US and China, are unlikely to adopt the tax. Effective implementation would require enhanced cross-border information sharing on affluent individuals and improved identification of beneficial ownership of various assets.
Despite the hurdles, Zucman insists the tax is feasible, even amid current global political turbulence.
A recent Henley & Partners’ Wealth Migration Report 2024 showed that Saudi Arabia is set to welcome as many as 300 millionaires this year.
The report added that the UAE continues to be the top destination for high-net-worth individuals (HNWIs), with an estimated 6,700 millionaires expected to flock to the country by the end of 2024 boosted by large inflows from the UK and Europe.
Factors such as the UAE's tax-free income, golden visa residency program, and strategic geographic location contribute to its appeal for migrating millionaires.
Another Julius Baer's Global Wealth and Lifestyle report revealed that Dubai has dropped to the 12th spot from 7th in the latest ranking of the most expensive cities for HNWIs.