World’s billionaires should pay minimum 2% wealth tax, say G20 ministers

Brazil, Germany, Spain and South Africa sign motion for fairer tax system to deliver £250bn a year extra to fight poverty and climate crisis

The world’s 3,000 billionaires should pay a minimum 2% tax on their fast-growing wealth to raise £250bn a year for the global fight against poverty, inequality and global heating, ministers from four leading economies have suggested.

In a sign of growing international support for a levy on the super-rich, Brazil, Germany, South Africa and Spain say a 2% tax would reduce inequality and raise much-needed public funds after the economic shocks of the pandemic, the climate crisis and military conflicts in Europe and the Middle East.

They are calling for more countries to join their campaign, saying the annual sum raised would be enough to cover the estimated cost of damage caused by all of last year’s extreme weather events.

“It is time that the international community gets serious about tackling inequality and financing global public goods,” the ministers say in a Guardian comment piece.

xmunk,

Alternative proposal. Billionaires should pay an annual 75% tax on any income and any wealth in excess of 1 billion.

Yerbouti,

Alternative alternative proposal: being billionaire shouldn’t be possible. There should be a wealth cap.

Spitzspot,
@Spitzspot@lemmings.world avatar

A wealth cap tax…I could get behind that.

mp3,
@mp3@lemmy.ca avatar

Cap all personal wealth to 2³²-1.

jj4211,

Whoops, used a signed 32 bit value and it went negative.

gravitas_deficiency,

Uh, why not 99%, and you get a framed certificate congratulating you for winning capitalism?

Viking_Hippie,

100% on all wealth above, say, a quarter of a billion dollars and all income that would bring you above that threshold.

Glide,

Nah dude. If they hit a billion dollars, you take all their wealth, reset them back to level one, put a star next to their name and tell them to do it again. They’ll appreciate the sense of pride and accomplishment that comes with a second run.

Viking_Hippie,

Sorta like New Game Plus but without the plus? I like it!

xmunk,

It’d be hilarious to hear shit heels like Elon Musk talk about how they “earned” their wealth and then be completely unable to do it again.

Zehzin,
@Zehzin@lemmy.world avatar

When you get to 1 billion your wealth resets but you get exclusive skins

YourAvgMortal,

So they’ll be playing on a higher difficulty?

Zehzin,
@Zehzin@lemmy.world avatar

Same difficulty everyone else plays, which yeah it’s a lot higher than theirs

xmunk,

I’m kinda happy with 75%, maybe we could bump it up to 90 or so but at 75% wealth and revenue taxation billionaires would need to multiply their pot by 16x every year to maintain their wealth… that’s pretty unrealistic do everyone north of a billion would quickly trend to a billion - that number should ideally be lower (I think ten million or a number like that is a perfectly reasonable effective wealth cap) but that was the reference in the article.

Rivalarrival,

All registered securities (stocks, bonds,etc.) should be taxed at 75% per year. Natural persons are exempted from the tax on their first $16.7 million, with a progressive schedule up to the full tax rate at $1 billion in value.

Securities are not sold to pay the tax. A percentage of each security held by the ultra-wealthy taxpayer is transferred to the IRS. IRS liquidators sell off the shares in small lots over time, so that liquidated shares comprise no more than 1% of total traded volume.

just_change_it,

That isn’t how it works though. Nobody is collecting billions in wages. They receive stock which isn’t counted as taxable income until sold.

xmunk,

Sure, that’s why I also suggested a wealth tax.

jj4211,

But 75 percent wealth tax can’t work, because that would require more liquidity to happen than exists. The attempt would utterly destroy most retirement funds in the process. Wealth tax sure, but need to be realistic about the scale of “money” actually possibly in play.

xmunk,

It’d probably deflate a bunch of overvalued stocks in the process of liquidation which would be healthy for the economy overall but, you’re correct, it would cause short term shocks to retirement and other managed funds.

Aux,

No, long term there would be no economy. Wealth cannot be taxed. Humans tried that since ancient Roman times, never worked.

EinfachUnersetzlich,

1 billion of what currency? How do you account for inflation?

xmunk,

USD seems the general assumption (not like - pre-zero chopping Turkish Lira) and that level of wealth is far above a reasonable amount for one person to control.

theherk,

Alternative proposal: While your net worth exceeds some function of GDP, laws do not protect you. Find a way to offload those stocks, or keep your head on a swivel.

d00phy,

I would add that if you are securing loans above a certain total amount or used for certain purchase types to make a purchase, that purchase is subject to a sales tax that must come out of the purchaser’s pocket. The trouble with wealth taxes is that most of the “wealth” isn’t liquid, but it is often used, for example, as collateral to purchase Twitter. In this instance, the wealth used should be treated as liquid taxable assets. I think those taxes should come either from the purchaser divesting from some amount of assets or a straight cash, not from another loan, payment.

tburkhol,

Doesn’t matter if their wealth is illiquid, they can still pay a cash tax on it. Us mere mortals, whose major wealth is a house, pay a wealth tax on it every year. (in fact, considering that most homeowners still have a mortgage, they’re paying wealth tax on more than their actual equity) Most billionaire wealth is stocks, bonds, and real estate which are easily valued

What you’re describing, paying taxes when a purchaser divests assets, is exactly what we do now: a capital gains tax

DudeImMacGyver,

Two percent? Yeah fuck that, how about they pay their fair share instead?

BreakDecks,

A two percent wealth tax is actually a better idea than a lot of people here seem to think.

If you have $100B, you’d have to pay $2B every year that you hold that much wealth, and you’ll have to pay it in cash.

This would produce a lot of annual recurring tax revenue, and it would incentivize billionaires to hoard less paper capital if they don’t want to constantly be forking over billions in taxes.

The tax is beneficial, and so is the way around the tax.

Though we also need to tax their income more too.

jj4211,

Also, if you did go and try to tax 75 to 90 % like so many say, that means trillions and trillions of liquid money would have to exist from nothing to cover the collective tax burden, which didn’t exist, thus all the stock value collapses, taking retirement funds with them.

Have to be measures that recognize the partially fictional facet of some of these net worths while not letting them off the hook at the same time.

PopcornTin,

They’ll have to sell of their stocks to get that 2% to cash, which has the added benefit of lowering the stock’s value. Next year, we’ll bump it to 3% to make up the difference. Rinse, repeat.

DudeImMacGyver,

I pay way more than two percent and I live paycheck to paycheck, that’s fucked up.

FlyingSpaceCow,

2% of Wealth (not income) annually. I’m no expert but if that includes unrealized gains then that is SIGNIFICANT.

Buffalox,

Absolutely 100% this. We need a global effort so they can’t just move to some tax shelter.
2% is also cheap IMO, nobody needs to have that much money.

Damage,

If the developed world set this up, even if they moved money to a tax heaven, they’d have nothing to spend it on.

MakePorkGreatAgain,

reality check: not going to happen

n3m37h,

Each respective country should just appropriate the billionaires assets as no single person should have a net value higher than any single country

foggy,

Can we be specific and say “2% of their purported assets valuation must be paid in liquid cash annually” so they can stop loopholing taxes to oblivion?

Oh look, all of the sudden corporate entities are paying taxes instead of saying “oops yeah we broke even before bonuses.”

SteefLem, (edited )
@SteefLem@lemmy.world avatar

2% what the…. My income above 50k is taxed 48% i think. Wtf 2%

Edit: yes i know the difference, but still…

orrk,

ah, but imagine if you have 128Billion dollars, more than the GDP of many countries

Damage,

Wealth tax is different from income tax. Once you’ve received your income it becomes wealth, and it is not taxed unless you use it. Wealth tax would mean that your money in the bank is taxed periodically.

nac82,

Which is clearly necessary, and companies know it.

Open any MMO built and organized around a player economy (designed by a for-profit corporation) and you will see they know that individual wealth can upset the balance of the game.

They set maximum currency values, or they charge you periodic taxes for existing in the server.

When people are being honest about wealth, we all know the concentration of wealth in the extreme fucks up the system for everybody.

And video game systems do not even have a scarcity problem like the real world.

JJROKCZ,

That’s your income not your net worth, 2% of your net worth would be taking the value of all your cash + stocks/investments/businesses + assets like cars/homes/land/collectibles/jewelry/etc and taxing 2% of that value.

Your income shouldn’t be your net worth unless you’re honestly spending every dime of every check

Riven,
@Riven@lemmy.dbzer0.com avatar

A lot of us are poor enough where we sorta have to just to survive.

theangryseal,

I’m in that club. Woohoooo!

Good_morning,

Right? Who can afford to own things?

Valmond,

So what about people paying more in taxes than their net worth is?

JJROKCZ,

Not super relevant to the convo, everyone pays taxes based on income, the proposal is to make rich people ALSO pay on net worth, not all people. For most people the effort of doing a net worth assessment isn’t worth the tax income

Valmond,

Yeah I know, IMO hoarding wealth is just bad for the system we agree on (using paper slips and numbers in computers to exchange goods and services). It just gives power to the few, without the possibility to overturn them as we might in an election.

Supervisor194,
@Supervisor194@lemmy.world avatar

So I understand the ultra-rich’s way of doing business now is to never realize gains but rather take loans against a percentage of their unrealized gains (backed of course, by the unrealized gains themselves) and spend that money rather than ever make any income. Does anybody know of any good ideas to handle that type of scenario?

orrk,

sure, force them to realize gains by taxing unrealized gains that have gone unrealized for a certain amount of time

BreakDecks,

Forfeited shares held as collateral for a loan should require paying a capital gains tax if you default on the loan.

FlyingSquid,
@FlyingSquid@lemmy.world avatar

On top of a wealth tax, there should be a fraction of a percent financial transaction tax. It would have no effect on the average consumer, but a lot of effect on the investor class.

danc4498,

It’s weird to think I can be given stocks and have to pay real taxes for the value of those taxes. But somebody who starts a business and owns a large number of shares never has to pay taxes on those shares even though they got them when they were worth $0 and now are worth possibly billions.

Often times those shares can be used as leverage for a loan providing the shareholder with the quality of life of a billionaire without ever paying the taxes on earning the billions.

This feature of taxes ONLY benefits the super wealthy and everybody else just has to pay taxes for every dollar of wealth earned.

jj4211,

You only pay taxes when it comes in as “income” or when you sell it. You can hold onto stocks without being taxed on it indefinitely.

Stocks as collateral needs reform.

Syntha,

Often times those shares can be used as leverage for a loan providing the shareholder with the quality of life of a billionaire without ever paying the taxes on earning the billions.

How are those loans repaid?

danc4498,

Either with a paycheck from the company, or selling shares. They will pay taxes on that small portion of their wealth over the life of the loan.

But this is a million times better than having to pay taxes on 100% of their wealth before getting to use it like the 99% of us do.

Ulrich_the_Old,

If taxation were done properly there would be no billionaires. They are a symptom of a broken tax system.

Daxter101,

So, I’m assuming you are in support of a 2% wealth tax?

Sorry if I sound paranoid, just checking. Tone is hard to convey in text.

chiliedogg,

2 percent for those who would dip below a billion.

Just make a billion dollars a hard limit. Once you achieve that wealth, you aren’t allowed anymore. If it’s because of stock values, then any shares after you hit a billion are distributed among employees (including “contract workers” who they pretend aren’t employees).

If it’s in cash money anything over a billion goes to the government.

If it’s in real estate properties are seized and sold at auction according to the land use. For housing, it’s only sold to individual people who will use the property as a sole homestead. For small offices it’s sold to businesses with a single location.

If it’s art it’s donated to a museum in the art’s place of origin.

DreamlandLividity,

So what I am hearing: buy shit in a different country than the one you are running, where you can’t tax it. No investment and jobs for your economy.

Also, how do you determine the value of an ltd? Not all companies have shares and share price.

EurekaStockade,

Private companies are valued all the time, typically it’s by calculating a multiple of EBITDA, with some variations for particular industries

FlyingSquid,
@FlyingSquid@lemmy.world avatar

Twitter is a private company. Has been since Musk bought it and took it private.

And yet, we can still calculate that its value has fallen substantially since that happened.

theguardian.com/…/x-twitter-stock-falls-elon-musk

DreamlandLividity,

First of all, the article clearly states Fidelity owns shares, hence it is not fully private. Second of all, you are talking about the assessment of the company that holds the shares. Are you suggesting an honor system where everyone estimates their own wealth?

FlyingSquid,
@FlyingSquid@lemmy.world avatar

Private companies can still sell shares. They’re just not publicly traded.

DreamlandLividity,

Ok, technically you are right although since Fidelity is publicly traded, it is a somewhat special case IMO. That is what I meant by it not being fully private. If it was owned ultimately by an individual, there would be no reason for such disclosure.

More importantly, this does not change my argument about it being a self reported value.

force,

More like a symptom of a broken broad economic system. In all forms of capitalism, it is a given that much wealth accumulates in the few. It’s a system where resources are distributed based on capital, and capital is a resource, and it’s a system where those with more capital have more voting power both economy-wise and politics-wise. There is no such thing as a capitalist economy that has even wealth distribution long-term, it was quite plainly a system created for the sole purpose of keeping those with power in power – this isn’t an exaggeration, the guys who basically created/popularized modern capitalism and are the basis for all the writings and philosophy of the “founders of capitalism” were post-french revolution aristocrats who wished to push a system where they could keep their power instead of having it taken while also not having their heads chopped off.

Even with the best taxation capitalism can offer, there is no solution to the capitalist problem. It’s a system that requires there to be suffering underclasses and carefree upperclasses. It requires an immoral social hierarchy to exist. The systems that reduce the damage of this innately bad hierarchy while still maintaining it (welfare corporatism, for example) are incredibly unstable over the long-term and inevitably result in a populace that want to tear it down. The people who receive the most benefits from welfare & social safety in a capitalist society are often the ones that are the quickest to tear it down (them, and the elite) and guide us back to right-wing feudalism.

Billionaires might maybe go away if we “properly” tax, but there is only so much you can do to patch up a fundamentally broken system. The countries with the most wealth equality and highest wealth taxes also happen to be countries with a ton of megacorporations and/or billionaires… Switzerland, Scandinavian countries, Finland, Germany, Australia all have the highest wealth equality while all being on the top 15 for billionaires per capita excluding extremely small nations. Plus those countries have a tendency for alt-right movements to pop up, a few even more by proportion than the US…

TL;DR capitalism bad socialism good eat the rich

Sanctus,
@Sanctus@lemmy.world avatar

Try 90%, and they’d still have obscene wealth afterwards.

mememuseum,

Exactly, 10% of a billion dollars is one hundred million. That’s more than enough to live a cushy stress free life without ever working again if you’re not an idiot blowing it all on dumb shit.

That puts you in the same net worth bracket as a lot of celebrity actors and musicians.

Valmond,

0.018 Billions is 3.000 a month for 500 years.

Not what people think usually.

twei,

if you’re not an idiot blowing it all on dumb shit

I’d argue that 100 Million, if invested with like 5% annual growth, would be enough even if you’re an idiot blowing it all on dumb shit

dan42O,

As a person from a diff cultural background, people and relatives who have more money always help and pave the way for a smoother future for the folks who don’t. As example, my maternal family had distant family member help out in the house. And know we have strong relationships and continued support both emotionally and financially and gateway to other aspects for a smoother life.

tearsintherain,
@tearsintherain@leminal.space avatar

That’s nice but kinda pollyanaish and not a model of how economies should work. In fact the gross inequity between the wealthiest sliver of human beings against the majority is outrageous and immoral.

thejynxed,

When you see a bunch of comments suggesting ideas that make it obvious the commenters don’t hold any grasp on economics or finance whatsoever.

Maalus,

Most of it is populist catchphrases without any thought behind it.

DreamlandLividity,

Here is a conspiracy theory for you. This bullshit is pushed by the people not wanting meaningful reform. Just like oil companies try to distract with Carbon capture.

“We need this simple reform.” "No, we need Communist revolution! Eat the rich!”

fine_sandy_bottom,

Or even how to levy taxes?

There’s a reason billionaires pay the least tax - because it’s legit hard to do.

It’s not as though no one has thought of a wealth tax before. It’s that no one has been able to figure out how to do it.

Obviously, you can only tax the wealth you can identify and value, and therein lies the problem.

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