Brazil’s Bold Tax On Billionaires Sparks Heated Debate At G20 Summit

A proposal by Brazil to create a global tax on the ultra-wealthy stirred debate among G20 finance ministers in Rio de Janeiro on Thursday, with the United States expressing skepticism about the need for an international agreement on the issue.

The initiative, championed by Brazil’s leftist President Luiz Inácio Lula da Silva—who is currently leading the G20 as its chair for the year—was a major focus of the meeting. Despite this, US Treasury Secretary Janet Yellen tempered expectations by arguing that a global consensus on taxing billionaires was unnecessary.

“Tax policy is very difficult to coordinate globally,” she told journalists. “We think that all countries should make sure that their taxation systems are fair and progressive.”

Supporters of the proposal viewed its inclusion on the agenda as a crucial initial move.

Following the meeting, Brazil’s Economy Minister Fernando Haddad expressed optimism about the plan. He described the upcoming final “declaration,” scheduled for release on Friday, as a significant “first step” toward advancing the initiative.

This communiqué will address “Brazilian proposal to start looking at international taxation, not only from the point of view of companies, but also from the point of view of individuals called the super-rich.”

A participant at the meeting, who spoke on the condition of anonymity, told AFP:”There is no consensus today to create a global tax on the capital of multimillionaires.”

“The idea is to have the theme on the agenda and the first steps discussed.”

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Brazil’s push for a global tax agreement on the ultra-wealthy is supported by France, Spain, South Africa, Colombia, and the African Union.

“Some individuals control more resources than entire countries,” Lula announced on Wednesday, the launch of a new initiative to combat global hunger, which is also a top priority on his G20 agenda.

Haddad stated to local media on Wednesday that implementing a tax on billionaires could provide crucial funding for combating global hunger.

A recent study by the NGO Oxfam, published Thursday, highlights a growing global inequality gap. The wealthiest 1% have accumulated over $40 trillion in the past decade, yet their tax rates remain at historically low levels. French economist Gabriel Zucman, a G20 consultant on taxation, estimates that billionaires’ tax rates account for only 0.3% of their total wealth.

Germany’s finance ministry also voiced skepticism before the G20 meeting, labeling the concept of a minimum wealth tax as “irrelevant.”

The finance ministers’ gathering in Rio commenced with discussions on the global economy, noting a decrease in inflation rates in many regions following the surge driven by the war in Ukraine and other factors.

On Friday, the G20 finance ministers will address critical issues including climate transition financing and global debt in their final meeting before the G20 summit on November 18 and 19.

Established in 1999, the Group of 20 brings together 19 of the world’s largest economies, along with the European Union and the African Union. Originally focused on global economic matters, the G20 has expanded its agenda to include a broader range of pressing issues, though member states often have differing views on which topics should be prioritized.

Brazil’s presidency noted that there were disagreements among member states about whether conflicts such as those in Ukraine and Gaza should be included in the G20 discussions. The presence of diverse and sometimes conflicting interests, including Russia’s, has complicated efforts to produce a unified communique following these meetings.

The previous meeting of finance ministers in Sao Paulo did not result in a joint statement. Brazil aims to release three documents following this meeting, according to Tatiana Rosito, a senior official from the country’s economy ministry. These include a joint final communique, a document on “international cooperation in tax matters,” and a separate communique from Brazil addressing geopolitical crises.

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