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Proposal for a Global Wealth Tax on Billionaires

8th July, 2024 Economy

Proposal for a Global Wealth Tax on Billionaires

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  • French economist Gabriel Zucman, commissioned by Brazil’s G-20 presidency, has put forth a bold proposal aimed at addressing global wealth inequality through enhanced taxation of ultra-high-net-worth individuals.
  • His recommendation for an annual 2% tax on individuals with wealth exceeding $1 billion is intended to stimulate international dialogue on fairer wealth distribution and sustainable economic practices.

What is the Proposal?

  • Zucman advocates for the adoption of a globally coordinated minimum tax standard specifically targeting billionaires. This standard would require individuals with wealth exceeding $1 billion to pay a minimum of 2% of their total wealth annually as tax.
  • The tax would encompass various forms of wealth, including but not limited to assets, equity shares (both listed and unlisted), and other ownership structures facilitating participation in company ownership.
  • It is estimated that such a tax could potentially generate between $200 billion to $250 billion in additional global tax revenue annually, derived from approximately 3,000 ultra-high-net-worth individuals worldwide.
  • If extended to cover individuals with net worth exceeding $100 million, the proposal could yield an additional $100 billion to $140 billion annually in global tax revenue.

Rationale for Such a Tax:

  • Global billionaires currently benefit from remarkably low effective tax rates, often ranging between 0% to 0.5% of their wealth.
  • This disparity in tax burden compared to other income groups underscores the need for more equitable taxation policies.
  • Over the decades, wealth concentration among the top 0.0001% of households has skyrocketed, growing from owning 3% of world GDP in the late 1980s to over 13% in 2024. This rapid accumulation has outpaced the growth rates of average incomes and wealth among broader populations.
  • Zucman argues that progressive taxation is a cornerstone of democratic societies, crucial for fostering social cohesion and trust in government institutions. Furthermore, increased tax revenues are essential for funding public goods and services and addressing pressing global challenges such as climate change.

Why moot such a Tax now?

  • Existing global tax systems have proven inadequate in effectively taxing the wealthiest individuals, resulting in significant revenue losses for governments worldwide.
  • Recent advancements in international cooperation and regulatory frameworks, including efforts to curtail offshore tax evasion and the establishment of a minimum corporate tax rate, provide a conducive environment for implementing such a proposal.
  • The successful adoption of a minimum corporate tax rate of 15% for large multinational corporations in 2021 serves as a precedent and demonstrates global willingness to prevent tax avoidance by large entities.

Support and Opposition:

  • The proposal has garnered support from Brazil, France, Spain, Colombia, Belgium, the African Union, and South Africa, underscoring its potential for broad international acceptance.
  • However, the United States has expressed reservations, preferring domestic tax reforms such as President Joe Biden's proposed minimum income tax targeting ultra-high-net-worth individuals.

Relevance to India:

  • India has witnessed a notable rise in wealth concentration among its top earners, with the top 1% now holding substantial income and wealth shares.
  • Implementing a wealth tax on the wealthiest Indians could generate significant revenue, potentially funding critical social expenditures that historically have been underfunded compared to global standards.
  • For instance, a modest tax of 2% on the total net wealth of the wealthiest Indian families could yield revenues equivalent to 0.5% of national income, substantially augmenting resources available for essential social services like healthcare, education, and nutrition.


  • In conclusion, Gabriel Zucman's proposal for a global wealth tax represents a concerted effort to address widening wealth disparities and ensure that the wealthiest individuals contribute proportionately to societal needs.
  • By advocating for fairer and more equitable taxation policies, the proposal aims to promote sustainable economic growth and enhance global social welfare.


Q. Examine the proposal for a global wealth tax targeting billionaire, commissioned by Brazil's G-20 presidency. Discuss its rationale, potential impacts on global wealth distribution, implementation challenges, and relevance to addressing economic inequality, with specific reference to India.