Calls for higher taxes on the super-rich are gaining traction and even conservative governments are joining in. In Rome, ministers in Giorgia Meloni’s rightwing administration have doubled a “flat tax” on foreign income from €100,000 to €200,000 (about £85,500-£171,000) that a previous government brought in to attract wealthy investors. Italy’s low tax on foreigners and their income gained abroad did its job after 1,186 rich individuals adopted the country as their tax residency, but protests this year showed it was out of line with the prevailing mood.
The country’s economy minister, Giancarlo Giorgetti, said Italy was now against the idea of countries competing with each other to offer “fiscal favours” to the wealthy. The decision came only weeks after 19 former heads of state – including the former prime minister of Australia Julia Gillard, and Dominique de Villepin, who had the same role during Jacques Chirac’s presidency – signed a joint letter calling for heavier taxes on wealth, and a meeting of G20 finance ministers that agreed more needed to be done to tax the global elite. While Giorgetti didn’t mention the UK, another prompt for the U-turn was Rishi Sunak’s partial abolition of tax breaks for wealthy foreign residents, known as non-domiciled status.
Italy’s favourable treatment became an embarrassment for Meloni, and even more so when Keir Starmer promised an incoming Labour government would take an even tougher stance on non-doms should it be elected. The rhetoric from Joe Biden has also helped the cause of a global wealth tax. The US president made an attack on the super-wealthy a central theme of his re-election campaign before stepping aside for Kamala Harris as the Democratic party candidate.
“I don’t think I have seen such big a transformation in the narrative around the tax on wealth as I have in the last three years,” said Rebecca Gowland, executive director of Patriotic Millionaires UK, a pressure group campaigning for an end to extreme wealth. “And what happened at the G20 is incredibly exciting. There is no concrete policy, but there is agreement from a wide range of countries that the issue needs to be taken seriously and that is a massive step forward,” she added.
The G20, which was formed after the 2008 crash to coordinate efforts to rebuild a battered global economy, has members from all parts of the globe, ranging from Saudi Arabia, Mexico, Turkey and Indonesia to the US, China, France and the UK. Brazil is the current host and the country’s president, Luiz Inácio Lula da Silva , is credited with putting a tax on wealth at the top of the group’s agenda. Da Silva invited the French economist Gabriel Zucman to advise the G20 on how to tax the super-wealthy in a way that all countries could coalesce around.
Zucman’s report – Minimum effective taxation standard for ultra-high net worth individuals – said billionaires were currently paying an average of 0.3% tax on their wealth. An effective tax rate is the amount calculated after all the loopholes and legitimate avoidance measures used by the rich are included.
Zucman said the average wealth of the top 0.0001% of individuals had grown by 7.1% a year on average between 1987 and 2024, increasing the share of global wealth of billionaires from 3% to 14%.
Describing his plan as a top-up to income tax, so that billionaires paid an annual tax bill worth at least 2% of their wealth, Zucman said progressive taxation was a pillar of democracy. A minimum tax equal to 2% of wealth on global billionaires would raise $200bn-$250bn (£150bn-£200bn) a year in tax revenue from about 3,000 taxpayers globally. Extending the tax to centimillionaires, who have $100m or more in assets, would generate an additional $100bn-$140bn, Zucman’s report said.
Norway has applied a tax on wealth for many years. As one of the world’s richest nations in terms of its wealth a person, this tax has often been a subject of debate. In 2023, a year after Oslo’s left-leaning government increased the rate from 0.
85% to 1.1%, local newspapers reported an exodus of the super rich, some of them to Switzerland. Spain re-introduced a wealth tax at the same time as Norway upped its own, sparking the same headlines about a caravan of millionaires leaving for more hospitable countries.
Spain’s wealth tax applies to fortunes greater than €3m and can reach 3.5% depending on individuals’ wealth. Many Swiss citizens have argued that its wealthy residents have enjoyed a free ride for too long.
Green campaigners argue the country is already suffering some of the worst effects of the climate crisis and the government, renowned for its low taxes, should spend more to reduce carbon emissions. After the influx of Norwegian billionaires and a heated debate about who should be paying more tax to fund climate-friendly initiatives, the youth section of the Swiss Social Democrats (Juso) proposed an inheritance tax of 50% on estates worth more than50m Swiss francs (£45m) with the money designated for the ecological restructuring of the economy. Juso collected 130,000 signatures in support of its “Initiative for a Future” petition, crossing the 100,000 threshold set by the Swiss parliament for a nationwide referendum.
In response the Swiss government said it would campaign against the tax when a referendum is held within the next two years, but with the ice melting on the Swiss Alps, politicians are under pressure to say where they will get the money from to tackle the climate crisis, if not from the super rich. Oxfam, which produces an annual global tax report, said it supports the G20 initiative, but wants it to go further than just tackling billionaires such as the former Microsoft boss Bill Gates, Bernard Arnault, the head of the LVMH luxury brand, Amazon’s Jeff Bezos and the German billionaires behind the Lidl and Aldi supermarket chains, the Schwarz and Albrecht families. Many governments fear chasing away wealthy investors to jurisdictions outside the G20.
Singapore and the United Arab Emirates have financial centres and low tax regimes that have encouraged many wealthy people to relocate in recent years. Christian Hallum, a senior tax policy adviser at Oxfam, said the G20 needed to resist the threat of an exodus. “Everyone in the top 1% has been doing extremely well for decades and paying lower effective tax rates than most households,” he said.
Oxfam wants centimillionaires to be included and the extra tax money to be targeted at anti-poverty measures. “We are all incredibly excited about what happened at the G20 finance ministers meeting and the intention to tax the super rich. But while 2% is better than nothing, it is at the low end of our ambitions.
There needs to be a huge effort to tackle global poverty and we need to cast the net wider,” he said..
