Countries can raise $2.1 trillion a year by following the example of Spain’s successful wealth tax on the 0.5% richest households – that’s double the amount needed annually for developing countries’ external climate finance, expected to be at the centre of COP29 negotiations this year.
The new study from the Tax Justice Network published today, and airing on BBC World TV this morning, estimates how much revenue each country can individually raise by taxing the wealth of only the richest 0.5% of its households at a feather-light rate of 1.7% to 3.5%. The wealth tax would only apply to the upper crust of the households’ wealth rather than all their wealth
The authors say that previous tax reforms targeting the superrich did not result in the superrich relocating to other countries, despite media headlines claiming the contrary. Just 0.01% of the richest households relocated after wealth tax reforms targeting the richest households were implemented in Norway, Sweden and Denmark.
A UK study predicts that non-dom status reforms would see a migration rate of between just 0.02% and a maximum of 3.2%.
Mark Bou Mansour, head of communications at the Tax Justice Network, said:
“Our economies were designed to let people earn the wealth they need to lead secure and comfortable lives, but our tax rules make it easier for the superrich to collect wealth than for the rest of us to earn it. This has let the superrich collect extreme wealth to the point of making our economies insecure and making it scarcely pay to earn a living.
“There’s this idea that billionaires earn wealth like everybody else, they’re just better at it. This is bogus. It’s impossible to earn a billion dollars. The average US worker would have to work for a stretch of time 13 times longer than humans have existed to earn as much as wealth as the world’s richest man has today. Salaries don’t make billionaires, dividends and rent money do. But we tax dividends and rent money much less than we tax salaries, and this is destabilising the earner model our economies are based on”
Recent polling shows overwhelming public support for wealth taxes on the superrich in several countries. A 68% majority of adults across 17 G20 countries are in favour of wealthy people paying a higher tax on their wealth as a means of funding major changes to the economy and lifestyles. Nearly three quarters of millionaires polled in G20 countries support higher taxes on wealth and over half of them think extreme wealth is a “threat to democracy”
