2024-07-25 23:53:00
At the G20 meeting in Rio de Janeiro on Thursday, disagreements broke out over the idea of establishing an international tax on the super-rich: the United States ruled out this option, but its defenders argued that the long process could bring a sigh of relief.
The issue was discussed at a meeting in Paris, driven by Brazilian head of state Luiz Inácio Lula da Silva, who this year chairs the grouping that brings together most of the world’s major economies as well as the European Union and the African Union, in the afternoon.
Even before the meeting, U.S. Treasury Secretary Janet Yellen softened the mood by saying there was “no need” for the U.S. to negotiate such a tax internationally.
While stressing that “the United States strongly supports progressive taxation,” she called on “each state to ensure that its tax system” is “fair and progressive.” “Tax policy is difficult to coordinate,” she explained at a press conference to justify her refusal.
However, at the end of the meeting, Brazilian Economy Minister Fernando Haddad expressed confidence, assuring that the final “declaration” to be released on Friday would mark a “first step”.
He added that the paper will discuss “the Brazilian proposal to start studying international taxation, not only from the perspective of companies, but also from the perspective of individuals known as the super-rich,” referring to “the conquest of moral nature.
“Wealth and income inequalities undermine economic growth and social cohesion and exacerbate social fragility,” the text continues. He insists on “promoting effective, fair and progressive tax policies” but makes no mention of an internationally negotiated single tax policy.
Exploding inequality
“For the first time in history, G20 countries have agreed that we must change the way we tax the super-rich,” said economist Gabriel Zucman, who wrote a report on the subject at Brazil’s request.
In addition to Washington, Germany’s Finance Ministry also considered the idea of a minimum wealth tax “not very relevant” before the G20 meeting, while several countries including France, Spain and South Africa supported the principle.
According to statistics, inequality has continued to widen in recent years. A study by the non-governmental organization Oxfam Released Thursday: The world’s richest 1% have increased their income by more than $40 trillion in a decade, but their taxes are at “historically” lows.
In addition to taxes and the international economic situation, the last meeting of the big financiers of the Group of Twenty (G20) before the summit of heads of state and government in Rio de Janeiro on November 18-19 must also discuss on Friday the financing of the climate transition and economic debt.
Find the joint statement
Since the outbreak of the war in Ukraine, G20 summits have been hampered by disagreements between Western countries and fellow G20 member Russia, so drafting a joint communique remains a challenge. The G20 finance ministers did not achieve this goal at their last meeting in Sao Paulo in February.
The solution envisioned by Brazil is to agree on three texts by Friday evening: a specific “declaration” on “international tax cooperation,” accompanied by a broader final communique, and finally a separate document issued by the Brazilian president that alone could draw attention to the geopolitical crisis.
An anonymous participant in the meeting said that “geopolitical issues have not been resolved” and “we are looking for the right way to maintain the spirit of consensus.”
Some countries see the G20 as a relevant forum to discuss these issues, while others see it the other way around.
The G20 was founded in 1999 and its original main remit was economics, but it has increasingly focused on hot issues in world news.
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