EU Parliament, call for taxation on “super rich” to counter inequality

From the correspondent in Strasbourg – “Tax the rich” to reduce global inequality. This is not the first time that redistribution and fiscal justice have been discussed in these terms, but due to the initiative of the Brazilian G20 presidency, there is a concrete proposal, which is also being discussed in Strasbourg.

Supporting the proposal is a studio by French economist Gabriel Zucman. The idea is to introduce a 2 per cent (minimum) tax on the wealth of the world’s billionaires, which would generate revenues of $200-250 billion annually. “Only individuals with extremely high net worth and particularly low tax payments would be affected,” the document reads. Specifically, the approximately 3,000 individuals with assets of about $1 billion.

There is great interest in the Brazilian proposal, part of a centuries-old discussion on global inequalities to which the planet’s rich contribute substantially. France, w​ith its new premier Barnier, is introducing taxation of wealthier compatriots, bringing itself ahead of the game (even as it does so for public debt reduction). Spanish premier Sanchez took an even stronger stance: “We will launch new actions to curb the disproportionate privileges of some elites and to tax those who already have enough money in the bank to live 100 lives.” Although the purpose is different, the two measures show that the issue is indeed becoming part of European policies.

As for the Union, the G20 proposal offers the opportunity to return to the subject. The Socialist Group has long supported the issue of income-proportional taxation “to achieve a fairer and more sustainable Europe.” The resources from this new tax would make it possible to finance Europe’s long-term goals by investing in social and climate initiatives.

“Today, workers’ income remains a major source of public funding in the EU, accounting for 51.4 per cent of GDP, while capital tax revenues account for only 8.5 per cent. This feeds increasingly unfair and unsustainable wealth gaps in our societies,” for Gabriele Bischoff, S&D Vice President for Sustainable Economy, Social Europe and the Single Market.

Of the same opinion, Pasquale Tridico, Chairman of the 5 Star Movement delegation to the European Parliament: “A fairer tax system would strengthen the fight against climate change, given that the richest 10 per cent is responsible for 50 per cent of global CO2 emissions. It would also increase demand, and economic growth would be stronger. The new European Commission will present a legislative proposal on this; we are ready to discuss it in the interest of European citizens.”

“The cultural battle we have been waging for years is beginning to bear fruit. Even the G20 is calling for a tax on billionaires,” says Manon Aubry, chair of the Left. Aubry gave concrete numbers in relation to wealth disproportions on the old continent, giving the example of Bernard Arnault. Reaching the CEO’s wealth of LVMH (a fashion and cosmetics financial group that encompasses groups such as Louis Vuitton and Sephora) would take “more than 10 million years of minimum wage work,” Aubry said.

The Patriots for Europe, in the words of MEP Pierre Pimpie, also expressed agreement with the tax proposal but with clarifications. “We agree on the need to tax these large fortunes more heavily, but it is essential that each state retains control over the tax revenues it receives,” Pimpie explained, specifying that interference in state competencies will not be allowed by PfEs.

“Capital can easily move across borders. Therefore, there should be no doubt that intervention at the supranational level and in multilateral fora is what we need,” Margaritis Schinas, Vice President of the Commission, concludes. We need to build on two fronts: taxation to reduce inequality and cooperation with the rest of the international partners for effective measures. Concludes Schinas, “All taxpayers, particularly very high net worth individuals, should and must pay their fair share of taxes.”