According to Forbes, the United States is home to 813 billionaires with a combined wealth of $5.7 trillion. At the upcoming G20 meeting in Brazil on November 18, a plan to impose a tax on the world’s 3,000 billionaires will be a key topic of discussion. The goal of this “global wealth tax” is to address tax avoidance by the ultra-wealthy, particularly in the U.S.
French economist Gabriel Zucman has proposed this plan, claiming it could generate up to $250 billion annually. His research reveals that billionaires pay just 0.3% in taxes on their wealth, whereas in many parts of the world, income tax rates range from 15% to 60%. Zucman argues that the super-rich are exploiting loopholes to reduce their tax burden. His plan would require billionaires to pay at least 2% of their wealth in taxes annually, a small amount compared to what ordinary citizens pay.
If implemented, the wealth tax would significantly affect the U.S.'s wealthiest individuals. For example, Elon Musk, with a fortune of $195 billion, would owe nearly $4 billion annually. Despite the G20 finance ministers agreeing to address the issue in July, a comprehensive deal has yet to be reached.
The push for a global wealth tax is being led by countries like France, Spain, and the African Union. With two-thirds of the world’s billionaires living in the U.S. and China, American billionaires dominate the list. Forbes reports that 14 of the top 20 wealthiest people are U.S. citizens, including Jeff Bezos, Mark Zuckerberg, Warren Buffett, and Bill Gates.
A 2021 ProPublica investigation revealed that many of these billionaires pay minimal income tax. Their wealth grows exponentially, but their tax obligations remain disproportionately low. South African tax expert Johan du Plessis pointed out that middle-class households are heavily taxed, while the rich use legal strategies to avoid paying their fair share. He noted that the increase in asset values, such as property, isn't taxed until the assets are sold, a rule that benefits the wealthy.
In contrast, the average U.S. household in 2023 earned $80,610 and was taxed at a rate of 22% for individuals. Higher income brackets face even steeper taxes, with couples earning over $731,201 paying 37%. Between 2014 and 2018, the 25 richest Americans saw their wealth rise by $401 billion but paid only $13.6 billion in federal income taxes.
President Joe Biden has frequently advocated for increasing taxes on the wealthiest Americans, emphasizing the need for tax fairness.