Germany, Spain, South Africa and France have expressed their support for Brazil’s proposal to impose a global tax on the wealthiest.
In their letter published by several media outlets – including Der Spiegel (Germany) and El Pais (Spain)—five ministers of these three countries as well as of Brazil they assure that this initiative would be an “important step” in the global fight “against inequalities”.
“The last two decades have been marked by a significant increase in inequality in most countries, with the gap between the incomes of the richest 10% and the poorest 50% almost doubling,” the ministers underline.
A situation that “harms economic development” and is proving to “erode democracy”, continues the letter, which is signed by Spain’s Deputy Prime Minister Maria Jesus Montero, German Development Minister Svenia Schulze and South African Finance Minister Enoch Godogwana, among others.
In their letter, the ministers denounce “persistent loopholes” in the international financial system, which allow the richest to significantly reduce their taxation: on average, “income tax” paid by billionaires does not exceed “0.5%” of their property, they explain.
Establishing a “coordinated, global, minimum withholding tax on billionaires” would allow these loopholes to be addressed and give governments the means “to invest in social goods such as health, education” or the “environment”, they add.
For this reason the ministers declare that they strongly support Brazil’s initiative for an “international, inclusive, fair and effective fiscal cooperation”. “The time has come for the international community to take seriously the fight against inequalities and the financing of global public goods,” they conclude.
According to the protothema, Brasilia, which has held the rotating presidency of the G20 since December, has reduced global taxation of the richest to one of its priorities.
Brazil was inspired by the work of French economist Gabriel Zikman, who suggested that if the world’s 3,000 billionaires paid at least the equivalent of 2% of their wealth in taxes, an additional $250 billion could be raised.
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