Draft:Global Wealth Tax

A Global Wealth Tax is a proposed world taxation system on the net wealth of individuals or entities, applied internationally with the intent to reduce inequality and fund global initiatives. It would target assets like property, stocks, and other valuables, rather than income, aiming for a fairer distribution of resources across nations.

Basic concept

The objective of a Global Wealth Tax is to impose international taxes on overall wealth, which includes assets like investments and real estate, rather than focusing solely on income. Supporters believe such a tax system would defeat the problem of tax noncompliance informally known as "tax migration", or "tax flight", which is the act of tax avoidance where the wealthy move their residency or assets to jurisdictions with more favorable tax rates, often referred to as tax havens. Proponents also believe that it could raise substantial funds to tackle global issues such as poverty, inequality, and climate change, while helping to reduce the wealth disparity between the affluent and the broader population. It is viewed as a means to overhaul the current taxation systems, which typically place a heavier tax burden on income compared to accumulated wealth.
It has been estimated that for the US alone, a tax of 2% on fortunes greater than US$4 million would generate US$500 billion per year. About half of that amount, around US$300 billion per year, corresponds to the total developmental budget goal of 0.7% GNI of industrialized countries (see Millennium Development Goals), which would enable poorer countries to cross the threshold of economic competitivity in 15–20 years (cf. Jeffrey Sachs: The End of Poverty). Some US$300 billion per year would also be necessary to limit global warming to +2 degrees Celsius and finance recovery from more frequent climate disasters. Expensive but probably inevitable strategies to slow global warming include renewable energy research, reducing greenhouse gas emissions, and reforestation (or preventing deforestation).
In 2023 Oxfam stated that a tax of up to 5% on the world's multimillionaires and billionaires could raise $1.7tn a year, enough to lift 2 billion people out of poverty.

History

Piketty in 2015

In 2014, Thomas Piketty published his bestseller book titled Capital in the Twenty-First Century, initiating much discussion regarding the concept of a global wealth tax. Piketty proposed that because the rate of return on capital tends to exceed total growth, inequality will tend to rise forever without government intervention.
The solution Piketty proposed is a global tax on capital. He imagined that the tax would be zero for those with less than 1 million euros, 2% for those with more than 5 million, and 5-10% for those with more than 1 billion euros. Piketty suggested the revenue could provide all global citizens with an endowment when they reach the age of 25 years.

Bregman in 2024

In 2019, Rutger Bregman quickly went viral when he famously took part in a panel debate at the World Economic Forum in Davos and drew significant attention for his outspoken critique of the wealthy's tax avoidance, and placing much of the popular attention on the matter. He advocated for higher taxes on the rich as a means to combat global inequality. His speech underscored the necessity for structural reforms to ensure the rich contribute their fair share through taxes. Bregman emphasized that instead of focusing on philanthropy or inequality discussions, the priority should be on wealthy individuals paying their taxes.

From the 2020s, Patriotic Millionaires, a group of high net worth individuals, began calling for governments to implement wealth taxes of those with extreme wealth.
In 2023, they penned a widely-circulated open letter to political leaders attending the January World Economic Forum in Davos, stating "The solution is plain for all to see. You, our global representatives, have to tax us, the ultra rich, and you have to start now."

As the date of the June 2023 Paris finance Summit for a New Global Financing Pact approached, 100 leading economists signed a letter calling for a wealth tax on the world's richest people in order to help the poorest survive climate change.
In October of that same year, the EU-funded Tax Observatory proposed a 2% tax on the wealth of the world's roughly 2,500 billionaires, estimating it could generate at least $214 billion. The tax would be collected by the countries where those individuals reside.

Haddad in 2023

In February of 2024, Finance Minister Fernando Haddad told his counterparts at a G20 meeting in São Paulo, that a complex system to offshore funds onto tax havens had been setup to benefit the ultra-rich, and that countries needed the world's billionaires to pay their fair share in taxes.
In April of 2024, and in anticipation to the 2024 G20 Rio de Janeiro summit, the G20 High-Level Side-Event on International Taxation Cooperation was held in Washington, DC, and later in May, the G20 International Taxation Symposium was held in Brasília.
In their June of 2024 joint declaration Rio de Janeiro G20 Ministerial Declaration on International Tax Cooperation, the participating nations stated that, while fully respecting tax sovereignty, they onwards will strive to work together to ensure that ultra-high-net-worth individuals are taxed appropriately.

Zucman in 2013

Also in 2024 Gabriel Zucman, commissioned by the Brazilian G20 presidency and also published via the Tax Observatory, again proposed a push for a global wealth tax on centimillionaires and richer still high-net-worth individuals entitled A blueprint for a coordinated minimum effective taxation standard for ultra-high-net-worth individuals. In the document, Mr. Zucman proposed a minimum taxation standard, coordinated in ways that would not require multilateral treaties and could be implemented in flexible ways by participating countries via various domestic instruments.