The world could raise $2.1 trillion a year by emulating Spain’s wealth tax on the richest households - double the amount needed for developing nations to implement their climate action plans by 2030.
That’s according to research by the Tax Justice Network (TJN), which found that the richest 0.5 percent own just over a quarter of the world’s wealth. Spain's super-rich are taxed on their assets to the tune of 1.7 to 3.5 percent. If other nations followed this example, TJN estimates that the world could raise over two trillion dollars each year to finance its climate action plans.
The study’s authors put current inequalities down to ‘two-tier’ tax systems, which see ‘collected wealth’ - such as dividends, capital gains and rent - taxed at lower rates than salaries.
The TJN research follows a joint declaration by G20 finance leaders who agreed that the super-rich should “contribute their fair share in taxes”. This new research follows the Brazilian proposal earlier this year, which will be put before the G20 summit in Rio in November, and calls for a 2 percent global tax on the wealth of the world’s billionaires. Though it would affect just 3,000 people, it would raise around $250bn (£195bn) and could be put towards global climate funds or to poverty alleviation.
Experts say a global agreement is needed to avoid some countries becoming tax havens for the ultra-wealthy, reports EuroNews.
Even many billionaires want to pay more tax, having signed an open letter pleading for as much in January. However, the US is among the nations opposing a global wealth tax.
“This needs to change now,” said Alison Schultz, research fellow at the TJN. “The climate can’t wait, and nor can the people of the world.”