Calls for greater taxes on the ultra-rich are gaining support, with even conservative administrations joining in.
The ministers in Rome under the right wing administration of Giorgia Meloni have doubled the flat tax on foreign income. Any income from €100,000 to €200,000 (about £85,500-£171,000) that was brought in by the last government in order to attract wealthy investors.
The lower tax on foreigners and their income earned abroad in Italy did the work right after 1186 wealthy individuals adopted the country as native and tax residency. Although the protests depicted the crossed line considering the ongoing scenario this year.
Giancarlo Gioregetti, the economy minister of the country stated that at present Italy is against the idea of the prevailing competition among nations to provide “fiscal favours” to the wealthy.
This decision was made only weeks after 19 former state heads which also included the former Prime Minister of Australia Julia Gillard, and Dominique de Villepin who played the same part during Jacques Chirac’s presidency.
While Giorgetti did not mention the United Kingdom, Rishi Sunak’s partial elimination of tax advantages for rich foreign residents, termed as non-domiciled status, also prompted the U-turn. Meloni was embarrassed by Italy’s privileged treatment, especially after Keir Starmer pledged an incoming Labour government would take a firmer position on non-doms if elected.
The power of speech from President Joe Biden acted as a catalyst to the cause of the global wealth tax. Before conceding defeat to Kamala Harris, the Democratic Party’s nominee, the US president made attacking the ultra-wealthy a major campaign issue.
Rebecca Gowland the executive director of Patriotic Millionaires in the UK said that she has never seen such a huge change in terms of the tax on wealth when compared to the last three years. She is a part of the pressure group campaigning for the end of extreme wealth.
She also stated that what went around at the G20 summit was exciting. The meeting concluded with no concrete policy on the tax for the wealthy but there is an agreement from the many nations to address the issue and take necessary measures. This is big on its own.
After the 2008 crash to bring together the efforts to rebuild the global economy the G20 which was formed had members from around the globe running from Saudi Arabia, Mexico, Turkey and Indonesia to the US, China, France and the UK.
According to Zucman’s analysis, Minimum effective taxation threshold for ultra-high net worth persons, billionaires presently pay an average of 0.3% of their wealth in taxes. An effective tax rate is estimated after accounting for all of the loopholes and valid avoidance methods utilised by the wealthy.
He also added, from the average between 1987 to 2024 the average wealth of one of the top wealthy individuals has risen by 7.1% a year. This increases the share of many global wealth of the wealthy billionaires to 145 from 3%.
The minimum taxation on the global billionaires equals the 2% of the wealth and would raise $200bn-$250bn (£150bn-£200bn) a year in revenue from about 3,000 taxpayers globally. The centimillionaires who have $100 million or more in assets would generate an additional $100bn-$140bn if the tax was extended to them as per reports.
Norway for many years has levied tax on the wealth for many years. This has often been the subject of debate as it is one of the world’s richest nations in terms of its wealth per person. In 2023, a year after Oslo’s left-leaning government raised the rate from 0.85% to 1.1%, local newspapers reported an exodus of the ultra-rich, some of whom went to Switzerland.
Many countries are concerned that wealthy investors would flee to non-G20 jurisdictions. Singapore and the United Arab Emirates have financial hubs and low tax rates, which have enticed many wealthy individuals to relocate in recent years.