AN AVAAZ PETITION urging US President Biden and the leaders and finance ministers of the G20 countries to “tax the entire wealth of the ultra-rich now” has been signed by over half a million people from around the world and is continuing to rapidly gain signatures. A wealth tax of five per cent could lift 2 billion people out of poverty, the petition states.

“A tax like this”, the petition adds, “could raise trillions annually, enough to address urgent social needs and environmental crises around the world.”

The petition has been signed by a number of prominent names and organisations, including Oxfam, and Patriotic Millionaires, a US-based group of high net worth individuals which includes Abigail Disney and calls for higher taxes for the rich. The petition has also been signed by leading economist and co-chair of the Independent Commission for the Reform of International Corporate Taxation Prof Jayati Ghosh, and inequality expert Jason Hickel.

President Biden proposed a new minimum wealth tax last month of 25 per cent on wealth over $100 million, which would apply to 0.01 per cent of Americans. The proposal would also increase the top tax rate for Americans making $400,000 to 39.6 per cent from 37 per cent, reversing one of the Trump era’s tax cuts. Historically, the US has exercised significantly higher top income tax rates on the wealthiest Americans. The top income tax rate stood at 94 per cent between 1944 and 1945, at 70 per cent between 1965 and 1981, and at 50 per cent in 1985.

The Biden administration proved capable in 2021 of driving global reform towards tackling glaring tax injustices that would otherwise take years to deliver, when it reinvigorated efforts for a global minimum tax rate on multinational corporations.

The global tax rate, previously discussed seriously only within the tax justice movement, is expected to be agreed this year, although in a shape and form removed so far by the OECD from the Biden administration’s original ambition that it is now heavily criticised as a “rewards programme” for tax havens rather than a speed limit.

While the Democrats’ lack of control of the US Congress does not provide much hope for Biden’s wealth tax, campaigners hope the proposals might once again encourage other countries to push through long needed tax reform, this time on the rapidly increasing wealth of the super rich rather than the shifted profits on multinational corporations.

The Tax Justice Network, which has also signed the petition, welcomed and commended the work of Avaaz in drawing attention to the huge and ongoing rise in inequality and the special treatment afforded by tax systems to the superrich.

Alex Cobham, chief executive at the Tax Justice Network, said: “Our tax systems are often programmed to put those who extract a living before those who work for a living. Under pressure from the super-rich and their lobbyists, our governments under-tax unearned incomes that arise from just owning and inheriting wealth, like dividend payments on shares, and more heavily tax earned incomes, like wages, to make up the difference. A wealth tax on the super-rich is an effective way to reprogramme our tax systems towards giving equal treatment before the law to unearned incomes and earned incomes.

“Wealth taxes also target those most responsible for climate damage. Mitigating the excessive consumption and irresponsible investments of the top one per cent is vital if we are to move back within planetary boundaries.”

Nell Greenberg, Deputy Director at Avaaz said: “Extreme poverty is increasing for the first time in 25 years! We can no longer afford to let billionaires avoid paying what they owe in taxes. In order to effectively crack down on extreme wealth inequality, President Biden has the historic opportunity to lead G7 and G20 countries to tax the mega-rich and address tax evasion.

“At this rate the goals to end poverty, hunger, and get all kids in school will tank if the one per cent continue to hoard all the world’s wealth. Inefficient taxation and wealth inequality is a global problem and changing regulation in just one country won’t fix it – we need global collaboration and coordination. Inequality, like climate change, is a global crisis that requires global solutions.”

* Sign the petition here.

* Source: Tax Justice Network