Time for a Change: Billionaires Could Face a Minimum Tax Rate, Says Report

The EU Tax Observatory has pointed out that most people pay a higher tax rate compared to the super-rich. These ultra-wealthy individuals use complex business structures to avoid paying their fair share of taxes.

To address this issue, the report suggests implementing a minimum 2% tax rate on billionaires’ global wealth, which could generate $250 billion annually. There are approximately 2,500 billionaires worldwide with a combined wealth of $13 trillion.

The EU Tax Observatory, which is associated with the Paris School of Economics, has been examining efforts to ensure fair taxation for individuals and companies over the past decade. While significant progress has been made in reducing offshore tax evasion through the automatic sharing of wealthy individuals’ financial information across more than 100 countries, billionaires often manage to pay extremely low tax rates, sometimes as low as 0% to 0.5% of their wealth. They achieve this through the frequent use of shell companies to avoid income taxation.

The report acknowledges that imposing a 2% tax on billionaires may sound ambitious, but it compares this to the once-“utopian” idea of Swiss banks exchanging tax information with tax authorities, which has now become a key measure against tax evasion.

While the report praises the 2021 agreement among 140 countries to ensure that corporations pay at least 15% in corporate taxes, it notes that this plan has been…