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Biden’s billionaire tax hits the super-rich. Can a wealth tax work?


The rise of the Robin Hood tax

Calls for a wealth tax on the world’s super-rich are once again gaining attention after U.S. President Joe Biden said he would impose a new “billionaire tax” on the country’s wealthiest if re-elected in November.

Outlining his 2025 budget proposals on Monday, Biden took aim at the uber affluent and reiterated plans for a 25% tax on Americans with a wealth of more than $100 million.

“No billionaire should pay a lower tax rate than a teacher, a sanitation worker, a nurse,” he said Thursday.

The plans, previously outlined in the president’s 2024 budget, reignited a decades-old debate over how best to account for the wealth of the world’s richest.

The issue has taken on fresh significance this year, however, as governments globally look for new ways to plug dwindling public finances and tackle wealth inequality.

This is about the wealthy contributing more … the extremely wealthy contributing more and being proud to do that.

Phil White

retired business owner and member of Patriotic Millionaires

Last month, global finance ministers meeting for a G20 summit in Brazil said they were exploring plans for a global minimum tax on the world’s 3,000 billionaires to ensure the hypermobile 0.1% pay their fair share to society.

Such ideas even have the backing of some of the world’s wealthiest. In early 2024, a growing network of so-called “Patriotic Millionaires” signed an open letter to world leaders, calling for higher taxes for the wealthy. Among the 260 signatories were Disney heiress Abigail Disney and “Succession” star Brian Cox.

“This is about the wealthy contributing more to the society, the extremely wealthy contributing more and being proud to do that,” Phil White, retired business owner and Patriotic Millionaires co-signatory, told CNBC.

But experts are divided over the effectiveness of a wealth tax, and its how achievable it is in reality.

What is a wealth tax?

A wealth tax is a “broad-based” tax on the value of all — or most — of the assets belonging to a wealthy individual or household, such as cash, property, vehicles, jewelry and other valuable items.

Unlike income tax, which is charged against annual earnings, and capital gains tax, which is imposed on profits accrued from the sale of an asset, wealth tax is seen as a more holistic way of accounting for an individual’s total wealth.

Such taxes were once prominent in Europe, though implementation dwindled at the turn of the 21st century amid questions over their efficiency and a broader shift toward lower top-end tax rates.

Wealth taxes were once a prominent source of tax revenues in Europe, though implementation dwindled at the turn of the twenty-first century

CNBC

As of 2024, Switzerland, Norway, Spain and are among the few countries to impose some form of wealth tax. But more countries are coming around to the idea. Colombia introduced a wealth tax in 2022, and the Scottish government is among others to have touted proposals.

According to Arun Advani, associate professor of economics at the University…



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Biden’s billionaire tax hits the super-rich. Can a wealth tax work?

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