JUST eight pence in every pound raised in tax revenue in G20 countries now comes from taxes on wealth, new analysis by Oxfam reveals ahead of the first meeting of G20 Finance Ministers and Central Bank Governors in Sao Paulo, Brazil.

By comparison, more than 32 pence in every pound (over four times as much) is collected from taxes on goods and services. Taxes on food and other necessities, for example, shift more of the tax burden onto lower-income families. In countries including Brazil, France, Italy, the UK and thebUS, the super-rich pay an effective tax rate lower than that of the average worker.

Oxfam’s research also found that the share of national income going to the top one per cent of earners in G20 countries has increased by 45 per cent over the last four decades. During the same period, the top tax rates on their incomes have fallen by roughly a third (from around 60 per cent in 1980 to 40 per cent in 2022).

G20 countries are home to nearly four out of five of the world’s billionaires. The top one per cent of earners in G20 countries made more than $18 trillion (£14.2 trillion) in 2022, a figure higher than the entire GDP of China.

Katy Chakrabortty, Oxfam Head of Policy and Advocacy said: “Countries are putting more and more money and power into the hands of a tiny, inequality-fuelling elite. As the finance ministers of the world’s largest economies gather this week, the focus should be on agreeing policies that close the gap between the richest and the rest – that means fairer taxation and support for everyone.

“Taxes on food and other necessities, for example, shift more of the tax burden onto lower-income families, and women in particular. Higher taxes for the super-rich means being able to tackle poverty, invest in the care and public services we need and protect the climate. It also means being able to repair holes in social safety nets, to soften the blow of future crises.”

Higher taxes on the wealth and income of the richest could raise the trillions of dollars needed to tackle both inequality and climate breakdown. Oxfam estimates that a global wealth tax of up to five per cent on the G20’s multimillionaires and billionaires could raise nearly $1.5 trillion (£1.1 trillion) a year. This would be enough to end global hunger, help low- and middle-income countries adapt to climate change, and bring the world back on track to meeting the United Nations’ Sustainable Development Goals (SDG) while still leaving more than $546 billion (£430 billion) to invest in public services and climate action in G20 countries. A wealth tax on British millionaires and billionaires at a rate of between one to two per cent on net wealth above £10 million, could generate up to £22 billion each year.

Brazil, as chair of the G20, plans to forge the first global agreement on taxing the super-rich to reduce global inequality. A recent poll on behalf of Patriotic Millionaires revealed that nearly three-quarters of millionaires in G20 countries support higher taxes on wealth, and over half think extreme wealth is a “threat to democracy.”

* Source: Oxfam GB