Argument that 2% of the world's richest billionaires should be taxed on 2% of their assets rather than their income to avoid tax evasion
The EU Tax Observatory, a research group created by the EU to obtain information on tax policy, has released the GLOBAL TAX EVASION REPORT 2024, which is the first report on global tax evasion. In this, the EU Tax Observatory argues that billionaires operate on the 'borderline of legality' by using shell companies and real estate to avoid taxes, so rather than taxing their income, they are taxing their assets. It is proposed that a tax should be imposed on the percentage.
GLOBAL TAX EVASION REPORT 2024
(PDF file)
EU-funded report calls for wealth of super-rich to be taxed, not income | Tax avoidance | The Guardian
According to the EU Tax Observatory, in the past decade governments around the world have begun large-scale efforts to reduce international tax evasion. Specific examples include the automatic exchange of multilateral financial account information, which has been implemented since 2017 and will be applied in more than 100 countries by 2023, and the automatic exchange of financial account information by multinational companies, which has been approved in more than 140 countries and regions in 2021. International agreements on minimum corporate tax rates are mentioned.
However, despite these important efforts, the effectiveness of the measures remains unclear, such as whether tax evasion is decreasing or increasing worldwide, and what, if any, new problems are emerging. It's not clear.
Therefore, the EU Tax Observatory has compiled this report based on research conducted in collaboration with more than 100 researchers and tax authorities around the world.
According to the report, offshore tax evasion (tax evasion using overseas accounts) by wealthy people is on the decline due to automatic exchange of financial account information. The number of tax evaders has fallen by a third over the past decade, the EU Tax Observatory notes, ``showing that progress is possible if there is political will to combat tax evasion.''
On the other hand, with regard to the much-anticipated minimum corporate tax rate of 15% for multinational corporations, it was initially expected that corporate tax revenues would increase by nearly 10% worldwide, but in reality, there were loopholes. In most cases, it's about half of what was expected.
Tax evasion, including tax evasion in the gray area on the border between legality and legality, is said to be increasing in each country. Billionaires around the world use shell companies to avoid income taxation and keep their effective tax rates down to 0.5% in the United States and 0% in France. In the United States, a law banning the establishment of shell companies was enacted in 2021, but the report points out that there is not yet a sufficient response globally.
A law has been passed in the United States that prohibits the establishment of ``shell companies'' that are a hotbed for asset hiding and money laundering - GIGAZINE
In order to respond to this situation, the EU Tax Observatory has made recommendations centered on ``imposing a tax on millionaires globally equivalent to 2% of their assets.'' If the top 3,000 people among the super wealthy were taxed, the tax revenue would be nearly $250 billion (approximately 37.36 trillion yen) a year.
In addition, raising the minimum corporate tax rate for multinational corporations could increase tax revenues by $250 billion annually. It is said that $500 billion (approximately 74.72 trillion yen) is needed annually to address the climate issues faced by developing countries, but the EU Tax Observatory says that this reform can meet that need. .
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in Note, Posted by logc_nt