The richest individuals pay the least taxes. What appears like a narrative from the Center Ages is a actuality in 2024. We spoke with famend economist Gabriel Zucman about why this can be a drawback and what we are able to do about it. His answer: a world wealth tax.

Interviewer: Are you able to clarify the impression of tax evasion by multinationals and the super-rich on broader society?

Gabriel Zucman: The primary impression is that it will increase inequality. When the richest individuals keep away from taxes, the remainder of the inhabitants has to pay extra. This enables the super-rich to build up much more wealth, which makes inequality worse. That’s why it’s so vital to battle tax evasion.

Interviewer: If we may scale back tax evasion, what advantages would there be for the typical citizen?

Gabriel Zucman: Firstly, if the richest individuals and multinational corporations paid their fair proportion of taxes, the remainder of us may see decrease taxes on revenue and consumption, like VAT. Secondly, extra tax income may go to important public providers like training, healthcare, and infrastructure. These are key drivers of financial development. Total, this might increase prosperity for everybody.

Interviewer: What particular actions can Austria and the EU take to fight tax evasion by the super-rich and multinational companies?

Gabriel Zucman: There’s a typical perception that particular person nations can’t successfully handle tax evasion, and that these points can solely be solved globally. This isn’t true. Any nation can take motion, like imposing a minimal tax on multinational companies. Whereas there’s a world minimal tax of 15%, Austria may enhance it to twenty% or 25%.

Moreover, Austria may implement a wealth tax for the super-rich. This could require individuals with greater than 100 million euros in wealth to pay no less than 2% of their wealth in taxes yearly. That is much like the concept of a minimal tax for multinational companies.

Interviewer: May you summarize your proposal for a world wealth tax on the super-rich?

Gabriel Zucman: The thought relies on knowledge exhibiting that billionaires have the bottom tax charges of all financial and social teams globally. It’s very simple for the extraordinarily rich to keep away from taxes. Our proposal, detailed within the World Tax Evasion Report and presently beneath dialogue on the G20, means that billionaires ought to pay no less than 2% of their wealth in revenue tax yearly. For instance, somebody with 10 billion euros in wealth ought to pay no less than 200 million euros in revenue tax annually. In the event that they already pay this quantity or extra, they wouldn’t owe extra taxes. Nevertheless, most billionaires presently pay little to no tax on their huge wealth, so this proposal would guarantee they contribute their fair proportion.