World News for Students of English

27-10-2023 15:00

The EU Tax Observatory suggests a global minimum tax on billionaires to combat tax evasion, which could potentially generate 250 billion dollars yearly.

This amount is a small fraction, about 2%, of the total 13 trillion dollars owned by the world’s 2,700 billionaires. Currently, billionaires often pay lower personal taxes by storing their wealth in shell companies, which reduces their income tax obligations. According to the 2024 Global Tax Evasion Report, this practice could undermine tax systems and public acceptance of taxation.

The director of the observatory, Gabriel Zucman, argues that this is unjustifiable and poses a risk to taxation’s sustainability. In some cases, billionaires pay as little as 0.5% in personal tax in the US and even zero in high-tax countries like France. Increasing wealth inequality has led to calls for the wealthiest individuals to contribute more to taxes, given the financial challenges of aging populations, climate initiatives, and COVID-related debts.

While an international effort to tax billionaires may take time, the success of previous efforts in ending bank secrecy and regulating corporate taxation offers hope for this proposal.

Difficult words: evasion (avoidance), undermine (to weaken), unjustifiable (unreasonable).

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