Yellen: "US Opposes Global Wealth Tax on Billionaires"

U.S. Treasury Secretary Janet Yellen has expressed opposition to a global wealth tax targeting billionaires. This proposal was previously put forward by Brazil, France, and other countries serving as the chair of the Group of Twenty (G20) summit.

[Image source=Reuters Yonhap News]

According to the Wall Street Journal (WSJ) on the 20th (local time), Secretary Yellen confirmed that the United States would not support such a wealth tax.

While Yellen supports a progressive tax system where tax rates increase with income, she stated, "We do not support introducing a global tax on billionaires to redistribute wealth worldwide. This is something we cannot agree with." This issue is also scheduled to be discussed at the upcoming Group of Seven (G7) finance ministers and central bank governors meeting in Italy this week.

Brazil, France, Spain, Germany, and South Africa, the G20 chair countries this year, previously proposed a global taxation method targeting the ultra-wealthy who freely move their assets to regions with lower tax rates. Similar to the agreement to apply a 15% global minimum tax rate on multinational corporations, they suggested introducing a global minimum wealth tax of 2% on the ultra-wealthy.

The aim is to prevent billionaires from avoiding tax payments while addressing global poverty, inequality, and climate change. Bruno Le Maire, France’s Minister of Finance, explained, "It is the same as setting a minimum tax on corporate income," adding, "International taxation on the wealthiest individuals is no different."

Previously, in 2021, 140 countries worldwide agreed to set a global minimum corporate tax rate of 15%. The WSJ noted that Secretary Yellen was a supporter of these global discussions at the time, but also reported that the proposal was not approved due to opposition from Republican members of the U.S. Congress.

Currently, most countries levy income tax based on an individual's residence. In the case of the United States, income earned worldwide is taxed, which already aims to minimize tax avoidance by Americans moving assets or earning income abroad.