EU TAX OBSERVATORY SAID MOST PEOPLE PAY A HIGHER RATE THAN THE SUPER-RICH – Billionaires should face a minimum tax rate
Billionaires should face a minimum tax rate, according to a report which found some of the world’s mega-wealthy are paying little to no tax.
The EU Tax Observatory said most people pay a higher rate than the super-rich, who, it said, are able to use complex business structures for avoidance.
It suggested a minimum 2% tax rate on the world’s billionaires would raise $250bn (£205bn) a year. There around 2,500 billionaires with combined wealth of $13 trillion.
The report by the EU Tax Observatory, part of the Paris School of Economics, examined how successful efforts to ensure individuals and companies pay their fair share have been over the past 10 years.
It said that the automatic sharing of the wealthy’s account information across more than 100 countries had significantly reduced offshore tax evasion.
However, billionaires are able to get away with paying tax rates equal to 0% or 0.5% of their wealth “due to the frequent use of shell companies to avoid income taxation”, it said.
Meanwhile, while the report commended an agreement in 2021 between 140 different countries to make sure companies pay at least 15% in corporation tax, it said that the plan had been “dramatically weakened” since then by a “growing list of loopholes”.
Some of the world’s richest people have pledged to give the majority of their wealth away. Microsoft co-founder Bill Gates, philanthropist Melinda French Gates and billionaire investor Warren Buffett set up the “Giving Pledge” in 2010 to “set a new standard of generosity among the ultra-wealthy”.
Following a series of tax changes in 2013, Mr Buffett conceded that even though his tax rate had risen he was still paying a lower percentage than his secretary.
“I’ll probably be the lowest paying taxpayer in the office,” he said at the time.