US Treasury Secretary Janet Yellen is rejecting a global wealth tax proposal championed by Brazil and supported by France and other G20 countries.
Yellen voiced her opposition during a meeting of G7 finance ministers in Stresa, Italy, on Thursday, according to reports.
"I'm not supportive of international negotiations that would involve all countries agreeing to do it and to redistribute the proceeds among countries, potentially based on climate and damage suffered from climate," Yellen told reporters, including Agence France Presse.
The proposal, which is being tabled by several G20 countries, aims to impose a 2 percent annual tax on the total wealth of the world's billionaires. The initiative has been advanced by Brazil, France, Spain, Germany, and South Africa, and is expected to be a topic at upcoming G7 and G20 meetings.
The EU Tax Observatory, a Paris-based research organization, estimates that such a tax could generate nearly $250 billion annually, and would impact fewer than 3,000 individuals.
Yellen’s statement Thursday echoes comments she made earlier this week, where she emphasized the Biden administration's preference for progressive taxation within the US but stopped short of supporting the proposed worldwide accord on taxing the ultra-affluent.
"We believe in progressive taxation," she said Monday, as per the Wall Street Journal. "But the notion of some common global arrangement for taxing billionaires with proceeds redistributed in some way—we’re not supportive of a process to try to achieve that. That’s something we can’t sign on to."
The administration led by President Joe Biden has repeatedly broached the idea of imposing taxes on high-income individuals in the US. Its 2025 budget proposal includes a minimum tax of 25 percent for the wealthiest 0.01 percent of Americans, targeting those with wealth exceeding $100 million.
"So it's not that I have any objection to imposing a reasonable level of taxation and certainly a minimum level of taxation on very high income individuals in the United States," Yellen explained Thursday, as per AFP. "But I don’t favour this particular formulation of how to go about doing this in an international tax negotiation."
Yellen acknowledged the financial needs of low-income and emerging market countries for development and addressing climate and health challenges. She mentioned Brazil's leadership in the G20 and its concerns about ensuring an adequate flow of resources.
"The US government recognizes the needs of low-income and emerging markets countries for financial support," she stated.
If a global wealth tax on billionaires were to pass, the US may end up bearing the brunt of it. According to the Bloomberg Billionaires Index, nine of the 10 richest people in the world live in the land of the free, led by megatech moguls Jeff Bezos, Elon Musk, Mark Zuckerberg, Larry Page and Bill Gates.
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