The U.S. opposes a proposed global wealth tax on billionaires, Treasury Secretary Janet Yellen has said
The US will not back a global wealth tax on billionaires, according to Treasury Secretary Janet Yellen, rejecting a proposal put forward by Brazil, France, and other countries.
Brazil, which holds the rotating presidency of the Group of 20 major economies this year, aims for the organization to adopt a unified approach to taxing the ultra-rich. The South American nation, which has the world's seventh-largest population, supports a global wealth tax to prevent billionaires from relocating their wealth to offshore tax havens.
Top officials from Brazil, France, Spain, Germany, and South Africa have proposed that billionaires pay an annual tax amounting to 2% of their total wealth. Proponents argue that this would reduce the wealth inequality gap and provide governments with more funds for social programs through increased tax revenues.
However, Yellen, who will meet with the finance ministers from the Group of Seven industrialized nations later this week, stated that the Biden administration opposes the idea, as reported by The Wall Street Journal.
“We believe in progressive taxation,” Yellen told the Journal. “But the notion of some common global arrangement for taxing billionaires with proceeds redistributed in some way — we’re not supportive of a process to try to achieve that. That’s something we can’t sign on to.”
The US is one of the few countries in the world that taxes its expatriates based on their overseas income. So even if wealthy Americans leave the country and move to a low-tax jurisdiction, they still have to file returns with the Internal Revenue Service.
In 2021, Yellen was a vocal supporter of a global minimum tax on corporations, which would have required companies to pay a 15% minimum tax in the jurisdictions where they operate. However, Republican opposition to the proposal prevented it from being enacted.
The Biden administration has also opposed proposals from the progressive wing of the Democratic Party, including a plan from Sen. Elizabeth Warren (D-Mass.) for an “ultra-millionaire tax” that would require households to pay an annual 2% tax on every dollar of net worth above $50 million and 6% on each dollar above $1 billion.
Instead, the White House has promoted a plan that would require Americans worth more than $100 million to pay an annual 25% tax on all of their earnings, including unrealized capital gains.
