Sanders and Omar lead congressional push for Global Wealth Tax as Biden faces crucial decision

This initiative, led by Brazil, aims to address the glaring disparities in global wealth distribution and strengthen efforts to achieve tax fairness.

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Image Credit: Ilhan Omar/omar.house.gov

U.S. Sen. Bernie Sanders and Rep. Ilhan Omar have taken a decisive step in urging President Joe Biden and Treasury Secretary Janet Yellen to support a groundbreaking initiative at the G20 to foster international cooperation on taxing ultra-wealthy individuals. This initiative, led by Brazil, aims to address the glaring disparities in global wealth distribution and strengthen efforts to achieve tax fairness.

On Tuesday, Sanders (I-Vt.) and Omar (D-Minn.), along with 16 other Democrats in Congress, sent a letter to Biden and Yellen emphasizing the importance of this initiative. They highlighted the significant opportunity for the United States to lead on global tax fairness while also bolstering domestic efforts to create a more equitable tax system.

In March, President Biden unveiled his 2025 budget blueprint, which included proposals to address unfair aspects of the U.S. tax system. Among these proposals was a 25% minimum tax on Americans with wealth exceeding $100 million. The letter from Sanders, Omar, and their colleagues supports this proposal and underscores the need for international cooperation to ensure the wealthiest individuals pay their fair share.

The lawmakers’ letter cited research showing that the richest billionaires in the United States pay an effective income tax rate of just 8.2%, while in some other countries, this rate is as low as 2%. They stressed that every tax dollar not paid by billionaires could be used to invest in critical public goods such as education, healthcare, and infrastructure, which are essential for prosperity and a strong economy.

Brazil, holding the G20 presidency this year, has been advocating for increased cooperation among G20 countries to support tax progressivity and ensure that the world’s wealthiest individuals contribute their fair share. This could involve coordinated standards, information sharing, or a global minimum floor for taxation of the wealthy. The proposal builds on the success of the 2021 agreement by more than 130 countries to create a global tax framework for corporate taxation.

In April, Brazilian Finance Minister Fernando Haddad, alongside leaders from Germany, South Africa, and Spain, called for a 2% wealth tax targeting the world’s billionaires. They argued that enhancing tax fairness is crucial for generating revenue to invest in public goods such as health, education, the environment, and infrastructure.

The letter from Sanders, Omar, and their colleagues argued that Brazil’s G20 initiative aligns with the strategic interests of the United States. They pointed out that international cooperation on taxation would strengthen domestic efforts to tax the wealthiest, including Biden’s proposed billionaire minimum income tax. By supporting this initiative, the U.S. could lead the G20 to a historic agreement that promotes a more equitable global economy.

The call for a global wealth tax comes amid growing concerns about the widening gap between the ultra-wealthy and the rest of society. In recent decades, the richest 1% of earners in the G20 have seen their top tax rates fall by roughly a third, while their share of national income has increased by 45%, according to Oxfam. A 2023 study by the Tax Justice Network estimated that countries around the world could lose up to $4.8 trillion in tax revenue over the next decade due to tax havens.

Exposés such as the Panama Papers, Paradise Papers, and ProPublica’s IRS files investigation have highlighted how the ultra-wealthy exploit loopholes to minimize their tax liabilities, depriving governments of crucial revenue needed for public services. Sanders, Omar, and their colleagues argue that it is time to close these loopholes and ensure that billionaires contribute fairly to society.

The letter to Biden and Yellen has garnered support from various organizations and academics, including the AFL-CIO, Americans for Financial Reform, Americans for Tax Fairness, Community Change, Groundwork Collaborative, Oxfam America, Patriotic Millionaires, Public Citizen, and Take on Wall Street. Nobel Economics Prize Laureate Joseph Stiglitz emphasized the importance of this initiative, stating, “Backing Brazil’s G20 initiative would go a long way to supporting President Biden and Secretary Yellen’s efforts to tax the ultra-rich and reduce today’s extreme levels of inequality.”

As the G20 meetings approach, the pressure is on President Biden to demonstrate global leadership on tax fairness. By supporting Brazil’s initiative, the U.S. can help secure a more equitable future for both the American and global economies. The decision now rests with the administration to take bold action and lead the way in addressing the global failure to tax the ultra-wealthy adequately.

“This is a historic opportunity for the United States to provide global leadership on tax fairness and also strengthen the administration’s vital domestic efforts to achieve a fairer tax system,” Sanders and Omar wrote. “We encourage your administration to join others in pledging support for this effort and help lead the G20 to a historic agreement that will secure a more equitable U.S. and global economy.”

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Alexandra Jacobo is a dedicated progressive writer, activist, and mother with a deep-rooted passion for social justice and political engagement. Her journey into political activism began in 2011 at Zuccotti Park, where she supported the Occupy movement by distributing blankets to occupiers, marking the start of her earnest commitment to progressive causes. Driven by a desire to educate and inspire, Alexandra focuses her writing on a range of progressive issues, aiming to foster positive change both domestically and internationally. Her work is characterized by a strong commitment to community empowerment and a belief in the power of informed public action. As a mother, Alexandra brings a unique and personal perspective to her activism, understanding the importance of shaping a better world for future generations. Her writing not only highlights the challenges we face but also champions the potential for collective action to create a more equitable and sustainable world.

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