Is your government strapped for cash on top of being hard-pressed to deal with tax evasion? The EU Tax Observatory offers a novel solution to the issue: tax the rich.
While the subject of imposing heavier taxes on the wealthy has been the subject of debate for decades, the EU Tax Observatory offers a rather compelling reason for their suggestion. Even if the 2,700 billionaires across the globe were taxed about 2% of their collective wealth per year, international governments stand to earn a collective amount of at least $250 billion.
Dealing with Wealth Inequality
In recent years, the calls to tax the super-wealthy have only grown louder in the face of dwindling public finances caused by dealing with issues related to climate change, aging populations, and a drain on human resources, as well as debts left over from the height of the COVID-19 pandemic.
Indeed, compared to the taxes levied on taxpayers with modest incomes, billionaires have been noted to pay much less in terms of personal income taxes, mostly because they put their money in shell companies that keep them from paying higher taxes. For experts, this practice simply needs to go.
According to Gabriel Zucman, director of the EU Tax Observatory, it is becoming more difficult to justify this practice as it undermines tax systems throughout the world and puts the sustainability and even the social acceptability of taxation into question.
Based on the Observatory’s studies over the past several years, it is becoming almost imperative that the richest citizens ought to be made to bear a greater portion of a country’s tax burden.
Zucman admits that getting governments worldwide to tax their respective billionaires is not something that may be accomplished overnight, but it is not impossible. He pointed out that, if governments could call out banks for their client secrecy policies and close any loopholes that could make multinational firms shift their operations to low-tax nations, placing the greater burden of taxes on the super-rich may eventually become a reality.