{"id":93304,"date":"2024-06-27T00:00:00","date_gmt":"2024-06-27T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/the-fruits-of-a-global-bnaire-tax-scheme\/"},"modified":"2024-06-27T00:00:00","modified_gmt":"2024-06-27T00:00:00","slug":"the-fruits-of-a-global-bnaire-tax-scheme","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2024\/06\/27\/the-fruits-of-a-global-bnaire-tax-scheme\/","title":{"rendered":"The fruits of a global bn\u2019aire tax scheme"},"content":{"rendered":"

What would it look like if global b\u2019naires had to pay the taxman?<\/strong> A global scheme to tax the world\u2019s 3k b\u2019naires could raise up to USD 250 bn annually, according to a report (pdf)<\/a> by French economist Gabriel Zucman, who maintains the scheme is feasible. Commissioned by Brazil, which currently holds the G20 presidency, the study highlights that the OECD\u2019s recently introduced 15% global corporate tax<\/a> attests to the potential success of imposing a global tax on wealthy individuals. Initially proposed by Brazil\u2019s finance minister in February<\/a> and endorsed<\/a> by French Finance Minister Bruno Le Maire, the draft proposal will be on the table for discussion at the upcoming G20 finance ministers\u2019 meeting in Rio de Janeiro next month.<\/p>\n

The study proposes a minimum annual tax of 2% on individuals with a net worth exceeding USD 1 bn.<\/strong> That\u2019s a departure from the current average tax rate among b\u2019naires of 0.3%, albeit far below the global average income tax rate. Zucman recommends an additional levy to ensure b\u2019naires contribute at least 2% of their wealth in taxes each year. The estimated tax revenue would be directed towards funding public services like education, healthcare, and climate change mitigation.<\/p>\n

Not everyone is on board:<\/strong> Implementing a global tax could be impractical with the \u201ctwo countries with the largest number of b\u2019naires [being] the US and China. Neither will realistically implement this,\" one tax policy pundit told the Financial Times<\/a>, expressing skepticism about the practicality of the proposal. For the tax to be effective, the report stressed that it is essential for countries to establish enhanced cross-border information sharing mechanisms on affluent individuals, including improving the identification of beneficial ownership across various assets such as financial holdings, properties, companies, and other legal entities.<\/p>\n

It\u2019s not going to be easy, but it\u2019s feasible \u2014 even with current global political turbulence<\/strong>, Zucman maintains. He points to the recent global corporate tax \u2014 which was met with fierce pushback<\/a> and is yet to be ratified by the US Congress \u2014 as evidence of possible change, Bloomberg<\/a> reports. However, for Brazil to garner support for the proposal after the end of its G20 presidency, it must demonstrate success with smaller reforms, as its \u201creal challenge is to maintain visibility and momentum,\" former chief broker for the global corporate tax agreement Pascal Saint-Amans told the news outlet. <\/p>\n

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