Brazil Leader Wants World’s Richest to Pay More

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Brazilian President Luiz Inácio Lula da Silva is set to propose a global wealth tax on ultra-rich individuals during the G20 summit in Rio de Janeiro, building on momentum from a July finance ministers’ meeting that endorsed exploring such measures.

The proposed tax scheme, developed by French economist Gabriel Zucman, would implement a 2% annual levy on billionaires’ total wealth, including property, stocks, and investments. Currently, the world’s wealthiest 0.01% pay an estimated effective tax rate of just 0.3% on their wealth.

Brazilian President Luiz Inacio Lula da Silva, hosting the G20 summit in Rio de Janeiro from Monday, will try to progress plans to tax the world's richest billionaires, who often use complex loopholes to avoid tax.https://t.co/HAlSGGE098

— DW News (@dwnews) November 18, 2024

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This initiative could generate approximately $250 billion annually from roughly 2,800 global billionaires, whose combined wealth reaches $13.5 trillion according to Forbes. The collected funds would address global inequalities and support debt-burdened low-income nations, particularly in Africa.

The OECD has backed increased taxation on wealthy individuals and corporations while advocating for reduced government spending. However, some experts express skepticism about the plan’s practicality.

“Most of the G20 countries are having a hard time balancing their budgets,” Maria Antonieta Del Tedesco Lins, an economist and associate professor at the University of Sao Paulo in Brazil, told DW. “While extra taxes would help, it’s very hard to juggle national pressures with new international or multilateral obligations.”

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While Brazil, France, Spain, and South Africa support the proposal, the United States remains opposed. U.S. Treasury Secretary Janet Yellen told the Wall Street Journal in May the measure was “something we can’t sign on to.”

The initiative faces additional uncertainty with President-elect Trump, who likely won’t support increased taxation on the ultra-wealthy.