According to a think tank jointly funded by the European Union, imposing a global minimum tax equivalent to 2% of billionaires' wealth can raise nearly $250 billion annually.
In a report released on Sunday, EU Tax Observatory proposed the imposition of such a tax and stated that fewer than 3000 billionaires were affected by it. The think tank claims that the effective tax rate for billionaires is equivalent to zero to 0.5% of their wealth, and they use shell companies to evade income tax. The think tank is located at the Paris School of Economics.
So far, no one has seriously attempted to solve this problem, "the think tank said.
Nobel laureate Joseph Stiglitz wrote in his report that if citizens do not believe that everyone has paid their taxes, they will begin to refuse to pay taxes.
He said that imposing a global minimum tax on the wealthy may seem impossible, but just a few years ago, weakening bank privacy protection and imposing a minimum tax on companies were also the same. About 140 jurisdictions have agreed to implement a minimum corporate tax in 2021, but the pace of implementation is slow.
EU Tax Observatory stated that offshore tax evasion has decreased over the past decade due to banks automatically exchanging customer information. But researchers from the think tank say that government policies can do more to prevent tax evasion. They say that additional tax funds can be used to address climate change, epidemics, and social inequality.