“I am surprised that you did not answer the simple question we have been asking for three years: when will we tax extreme wealth?” The open letter reads, “Proud to Pay More.” It begins with an initiative called.
The document, addressed to “World Leaders Gathering in Davos”, was handed out on Wednesday to world leaders gathered at a Swiss ski resort for the World Economic Forum (WEF). The signatories are calling for higher taxes on the ultra-wealthy.
Remarkably, many of the signatories are among the wealthiest people in the world.
The group 'Proud to Pay More' is made up of at least 260 billionaires and claims that steps need to be taken to 'address the dramatic increase in social inequality'. There is. They say they have reached a “tipping point” and that “the costs to the risks to our economic, social and ecological stability are severe and growing by the day, which means we need to act now.” Says.
They say their push for fairer taxes represents a “return to normalcy,” and that taxing the wealthy “reduces extreme and unproductive individual wealth to our common wealth.” transform it into an investment in the future of democracy.”
Billionaire: “I believe we should be taxed more”
“Any delay entrenches a dangerous economic status quo, threatens our democratic norms, and passes the buck to our children and grandchildren,” the signatories wrote. These include heirs Valerie Rockefeller, Abigail Disney, and Friedrich's ancestor Marlene Engelhorn, an Austrian citizen. Engelhorn founded the German chemical company BASF. “We not only want to be taxed more, we believe we should be taxed more.”
Engelhorn has criticized the fact that Austria has no inheritance tax, and recently made headlines when he said he wanted to redistribute 25 million euros ($27 million) of his inherited wealth.
“I inherited a fortune, a power, even though I didn't do anything,” she told reporters.
She established the Good Council for Redistribution to develop solutions that were in the “interest of society as a whole.”
The rich get richer, and get richer.
The gap between rich and poor continues to widen around the world.According to the World Inequality Report 2022, about 38% of the increase in global wealth from 1995 to 2021 went to the top 1%. Only 2% reached the bottom half, the world's poorest 4 billion people. And after the coronavirus pandemic hit in 2020, the wealth of the world's billionaires increased like never before.
There have already been several attempts to tax large sums of wealth further around the world. For example, during the 2019 US presidential election campaign, Sen. Elizabeth Warren proposed a “super-rich tax” on every dollar of net worth above $50 million.
However, implementing such measures is not easy.
Stefan Bach of the German Institute for Economic Research (DIW) in Berlin said: “The signatories of the Davos petition are mainly heirs who are not actively running their companies, and are therefore in possession of huge sums of money that they did not create.'' “I feel uncomfortable with the amount of wealth that people have.” “But they tend to be isolated voices.”
He said most ultra-wealthy people are more modest in this regard. In fact, there was strong political resistance from business groups, which generally had strong connections with high-ranking politicians, thanks to their cooperation with lobby groups.
“Many large fortunes are also tied up in business,” Bach said.
Business groups argue that the idea is that lower taxes give entrepreneurs an incentive to invest and create jobs, meaning higher taxes could threaten jobs and investment, potentially hurting companies. It may even lead to the heirs choosing not to run the company that they would have been able to take over.
“This debate essentially stifles any political debate about wealth taxes and inheritance taxes,” Bach said.
Change is unlikely as Europe moves to the right
In general, it does not make sense for a state to act alone when imposing taxes on large amounts of wealth.
“Large corporations, international corporations, and of course the super-rich all act in accordance with international law,” Bach continued, explaining that billionaires can easily move to other countries with more favorable tax policies. “In the end, nothing will be gained if only well-behaved small and medium-sized German companies that remain loyal to the country are extorted.''
However, he pointed out that it is possible to increase revenue for the national treasury through a balanced combination of higher taxes on top earners and a wealth tax.
“But, of course, this is only possible in an internationally coordinated manner,” he said, adding that in 2021, several attempts to curb tax evasion by large companies were successful.
More than 130 countries, which together account for 90% of the world's economic output, have also agreed to a minimum tax rate of 15% for companies, making it easier for companies to move to other countries with better tax rates. I was trying to prevent it from happening. Last year, several EU lawmakers proposed a similar global minimum tax on extremely high personal assets.
But Bach doubts there will be any progress on this front in the near future, and this is linked to a general shift to the right across Europe.
“There is very little left-wing majority left,” he said, explaining that it is important to get conservative and liberal parties on board when it comes to tax measures, which are inherently pro-business.
He said nothing would happen in Germany “for the time being” and “it's even more difficult to coordinate something like this on an international scale.”
This article has been translated from German.
