Since the beginning of the 21st century, the number of US dollar billionaires has exploded. For years, many advocates have been calling for the world’s richest individuals to make a greater contribution to the common good in order to fight inequality. On 26 July 2024, the members of the G20 finally agreed to cooperate in order to achieve this goal.

• Who are the ‘super-rich’?

In 2023, there were around 2,700 US dollar billionaires in the world, with a combined wealth of around US$13 trillion. They are mostly concentrated in Europe and North America, although the country with the most billionaires is China (814 in 2024). Nine of the ten richest people in the world (in terms of financial assets) are American. People with more than €1 million represent 1.1 per cent of the global population.

• Is it true that they don’t pay tax?

That depends on the country. Thanks to tax avoidance strategies (placing assets in ‘shell companies,’ for example), the super-rich often manage to reduce their overall tax rate. It is estimated that billionaires are personally taxed at an average of just 0.3 to 0.4 per cent of their wealth.

• What are the G20 countries planning to do?

Led by Brazil’s leftist President Luiz Inacio Lula da Silva, who heads the G20 this year, the world’s 20 largest economies agreed for the first time in July 2024 to cooperate on personal taxation and design new mechanisms to combat tax evasion. This decision came following a two-day meeting of G20 finance ministers and central bank governors.

However, the idea of a global tax on billionaires was ruled out, not least due to opposition from the United States, which insists on the ‘fiscal sovereignty of states’.

• Why are some calling this a historic turning point?

“For the first time in history, the G20 countries agree that the way we tax the super-rich needs to be changed. Until last February, taxation of the super-rich had never been discussed at the G20. In just five months, considerable progress has been made,” writes French economist Gabriel Zucman in the French newspaper La Tribune.

In a report on the subject commissioned by the Brazilian government, Zucman proposes global standardisation to ensure that the world’s largest fortunes are taxed at a minimum of 2 per cent of their assets. This could raise up to US$250 billion a year for governments.

• So there’s hope?

At its next meeting in November, the G20 is expected to agree on this percentage (the minimum standard) and the means of implementing this taxation. Many NGOs, such as Oxfam and Attac, trade union federations and the IMF itself are calling for greater tax justice.

International reforms once considered utopian have been adopted over the past 10 years. These include the automatic international exchange of banking information, which came into force in 2017, and the international agreement on a global minimum tax for multinational companies, proposed by the OECD and approved by more than 140 countries and territories in 2021 and implemented within the European Union on 1 January 2024. Taxing billionaires would be a logical extension of these reforms.

Learn more here:

Check out the EU Tax Observatory’s website and its Global Tax Evasion Report 2024.

Watch « Are Billionaires a Problem?» on ARTE channel. (26 minutes)