2024-07-22 03:19:10
Taxation for large companies and huge fortunes has always been a subject of debate. In 2022, Spain approved the Temporary Solidarity Tax on Large Fortunes (ITSGF) for all those riches of more than 3 million of euros, although the greater the wealth, the higher the tax. What was initially intended to be a rate applicable only for the years 2022 and 2023 is still in force in 2024 and, what’s more, it does not replace the Wealth Tax, but rather complements them.
In almost the same way, there is what in Spain we call the Inheritance Tax (the tax on inheritances) that can vary between communities, from 1% to 20% depending on the amount inherited. However, There are countries such as Austria that have waived any inheritance tax since 2008, This has led one of the country’s richest people, Marlene Engelhorn, heiress of the multinational chemical company BASF, to repeatedly take a stand in favour of raising taxes on the richest. Engelhorn rose to fame a few years ago for taking the decision to distribute 90% of her fortune: “If politicians don’t do their job and redistribute, then I’ll have to redistribute my wealth.”
And while virtually all countries levy a tax on large fortunes and the companies that make the most money each year, there is no common rate for the world’s “super-rich” – a controversy that even some billionaires, like the BASF heiress, would agree with. Here’s how Economist Gabriel Zucman has launched a proposal to implement a new tax for the ‘super rich’‘ of the world of 2%, which would initially affect around 2,700 fortunes.
‘Billionaires’ like Elon Musk and Amancio Ortega
It is not approved, nor will it be applied immediately, but one of the latest criticisms in this regard is the upcoming discussion by G20 leaders on the possibility of establishing a new global rate of 2% that willIt would affect people like Marc Zuckerberg, Jeff Bezos or Elon Musk (and 2,700 other people), whose individual fortunes are estimated at €200 billion.
This measure would respond to a long-standing request from economic experts and the occasional millionaire, such as Austrian Marlene Engelhorn, who warn of the low taxation of these “super-rich” people depending on their country of residence: due to a very good tax structuring of income and domiciles in tax havens, in many cases taxation is almost zero. More and more political leaders are also joining the proposal.
This is why the new ‘world rate’ will be discussed by G20 members at the next meeting, where I am sure will initially have the support of leaders such as Joe Biden of the United States, Emmanuel Macron of France, and Brazilian President Lula Da Silva, who has already pointed out on more than one occasion the lack of redistribution of wealth at a time when “the rich are getting richer and the poor are getting poorer.”
In this regard, the French economist, Gabriel Zucman, has been one of the most critical in this regard over the years and is the one who has proposed the ‘world rate’ of 2%: “People like Elon Musk or Jeff Bezos in some cases pay zero, or almost zero, in income tax.”
The owners of Tesla and the founder of Amazon, along with Meta CEO Mark Zuckerberg, are the most affected by the new global tax. The sum of the three fortunes amounts to more than 550 billion euros, according to Forbes magazine.
Other affected ‘billionaires’ could include Frenchman Bernard Arnault, the richest person in the world with an estimated fortune of 230 billion euros, the tycoon Warren Buffett (133 billion euros) and the founder of Microsoft, Bill Gates (104 billion euros). Meanwhile, Amancio Ortega (103 billion euros), the richest Spaniard in the country and the thirteenth in the world, would also be obliged to pay 2% of his wealth in taxes.
More than 200 billion euros in revenue
According to estimates, applying a 2% tax to the 2,700 largest fortunes in the world would imply a collection of some 215 billion euros annually, an exorbitant amount that even exceeds the GDP of countries such as Ukraine (€173.414 billion), Morocco (€147.343 billion), Slovenia (€133.044 billion), Ecuador (€118.686 billion) and even Luxembourg (€89.095 billion). In other words, half of Spain’s annual public spending.
The State Tax Inspector, José María Peláez, has already insisted once on the need to pursue these great fortunes because In many cases, these are “financial investments located in tax havens,” which makes it difficult to collect taxes through traditional methods.
On the other side of the world, US President Joe Biden has also been calling for a similar tax to be passed in the country for years: “Listen to me and pass my proposal for a minimum tax on billionaires.” Although the future of the American “super-rich” hangs in the balance, depending on the results of the upcoming presidential elections; If Donald Trump repeats his term, the new tax will be ‘banned’ in the American countryas the businessman opposes the new measure arguing that “we cannot allow the world to take advantage of us any more.”