Yellen at G7 says opposed to global wealth tax proposal

STRESA, Italy — US Treasury Secretary Janet Yellen voiced opposition Thursday to a global tax on the wealthiest, a project championed by Brazil during its G20 presidency and supported by France.

“I’m not supportive of international negotiations that would involve all countries agreeing to do it and to redistribute the proceeds among countries, potentially based on climate and damage suffered from climate,” Yellen said on the sidelines of the Group of Seven meeting of finance ministers in Stresa, Italy.

But French President Emmanuel Macron, in an interview with US television station CNBC aired Thursday, said a global wealth tax is “a good global debate” to have and that he would “push” the idea along with Brazil.

READ: Tax the rich: slow progress on the international front

Yellen told reporters that she and President Joe Biden are in favor of progressive taxation, just not this particular global one.

In the 2025 budget, the Biden administration has proposed a minimum tax of 25 percent for the “richest 0.01 percent” whose wealth exceeds $100 million.

“So it’s not that I have any objection to imposing a reasonable level of taxation and certainly a minimum level of taxation on very high-income individuals in the United States,” Yellen said Thursday.

The US government, she said, “(recognizes) the needs of low-income and emerging markets countries for financial support”.

She cited Brazil, the leader of the G20, which is “right to worry about an adequate flow of resources” for economic development and climate and health needs.

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“But I don’t favor this particular formulation of how to go about doing this in an international tax negotiation,” Yellen added.

2% tax on 3,000 billionaires to raise $250B a year

Brazil’s government was inspired by the work of French economist Gabriel Zucman on taxing the wealthiest.

Zucman claims that if the world’s 3,000 billionaires paid at least the equivalent of 2 percent of their wealth in global tax, it would reap an additional $250 billion per year.

French Economy Minister Bruno Le Maire said the proposed minimum taxation of the world’s wealthiest individuals is one of the priorities of the G7 meeting in the Northern Italian town of Stresa.

“We want to continue to promote the idea of a third pillar of international taxation on the wealthiest, so as to guarantee fairness in international taxation,” he told reporters on Wednesday.

Nearly 140 countries agreed in 2021 on a minimum taxation of multinationals under the aegis of the OECD group of wealthy countries.

It consisted of two pillars — the first aimed at a fairer distribution of tax revenues of multinationals, notably US tech giants, and the second a minimum 15 percent tax on multinational companies.

The second pillar was implemented on Jan 1 in many countries, including the European Union, but an agreement on the first has yet to be endorsed by all countries.