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Taxing the ultra-rich: "It's time to start a real reform of international tax rules"

The 130 signatories of the tribune urge the European Union to act on the subject of the taxation of the ultra-rich. © AFP / archives

Text by: Romain Lemaresquier Follow

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On Tuesday 14 March, at the initiative of MEP Aurore Lalucq and economist Gabriel Zucman, an article was published to call for the implementation of a tax for the ultra-rich at the international level. Signed by more than 130 MEPs, world-renowned economists, NGOs, trade unions, but also billionaires, this forum calls for a system that would resemble the one put in place to tax multinationals.

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Interview with Manon Aubry, MEP of the Insoumise France, and co-chair of the Confederal Group GUE/NGL in the European Parliament.

RFI: What is the purpose of this forum?

Manon Aubry: At a time when European states and other countries of the world are looking for financial resources, at a time when states like France prefer to make 60 million French people work for two years rather than involve a very small handful of billionaires, the challenge of this forum is to say: it is not inevitable if the largest fortunes in the world pay only 0.001% tax when any Citizen pays more than a few tens of percent in taxes.

The challenge is therefore to see our ability to agree to implement a new tax on large global fortunes, in the same way as what has been done in terms of tax rules for multinationals. We are far from having finished the work on the business side, but we still had the merit of agreeing on an international minimum rate of 15%, too low in my opinion [tax adopted by the EU on December 15, 2022, which should enter into force at the end of 2023, Editor's note]. Nevertheless, it demonstrates that it is possible to stop this race for tax competition.

Just at the European level, it seems complicated to implement?

The idea is to launch the topic and start this process. And I think that, in parallel with this international procedure, a few pioneering states should lead the way by adopting a form of universal tax that makes it possible to pull the rug out from under those who practice tax evasion.

The European Union could take an initiative in this area, as it has a major role to play in the fight against tax evasion. It is itself home to a number of tax havens, so there should be European drivers, the France could be one of them, who propose at European level a new agreement to tax large fortunes. We are talking here about a global tax of 1.5% on large fortunes. The idea is that we recover a minimum, part of the huge sum that is missing each year. It is estimated that between individuals and companies, the European Union loses an average of around EUR 1 000 billion each year. It is time to bring the machine back the other way and start a real reform of international tax rules.

Who would benefit from this financial windfall afterwards and how would it all be managed?

In terms of the taxation of multinationals and the new international tax, these are common rules that have been put in place, and then each State gets its share of the cake. The objective is to implement a tax on large fortunes with a similar operation. The France recovered a good part of the fortune that it does not recover today. The European Union as such also has taxes at European level. There are already tax levies which are then redistributed to each Member State according to their economic weight. The question "where would these revenues go?" is therefore ultimately a fairly easy question to deal with. The issue is rather: "Are we able to agree on common rules to ensure that the wealthy, at the international level, stop ignoring tax rules and paying as little tax as possible?

At the time when we debated the taxation of superprofits at European level, we proposed, together with all the left-wing groups, a tax on individuals. At a time when the European Union is asking itself the question of the reimbursement of its European recovery plan, there would be fairly easy ways to finance it with this tax on individuals. It has always been rejected until now. There is therefore a political battle to be waged in the European Parliament, in particular to question and challenge the Renaissance group in which sit the elected representatives of the Macronist majority in the European Parliament, who want to take an initiative to tax fortunes, but who have always voted against it when it came to materializing it concretely. There is also a cultural battle to be initiated, through public opinion, in a context of economic crisis. Now is the time to revive this debate.

► Read the op-ed on the taxation of the ultra-rich

Philip Lane, head of the European Central Bank, also suggests taxing the ultra-rich

The signatories of this forum call on the OECD and the United Nations to start negotiations on this tax. And indeed, the idea of taxing the ultra-rich and superprofits is not new and continues to gain traction. If the France has been struggling to agree on this debate for several months, abroad, the measure finds support... somewhat surprising.

In September 2022, Philip Lane, who is none other than the chief economist of the European Central Bank (ECB), came out in favour of taxing the highest incomes, to finance aid to the most precarious in the face of inflation. In an interview with the Austrian daily, Der Standard, on 27 September 2022, the senior official of the ECB, whose main mission is to maintain price stability, said that "governments should support the incomes and consumption of households and companies that suffer the most".

His solution? "This could take the form of higher taxes on high incomes or on industries and businesses that are very profitable despite the energy shock." Because, as Philip Lane justifies, "if you help people in need and you finance that by raising taxes, it has less effect on inflation than if you increase public deficits," he continues. An unexpected position given its issuer, but which proves the extent of the debate on the taxation of the rich.

Already during the discussions launched on the taxation of superprofits in September 2022, the France remained cautious on the issue, in comparison with its European neighbors Italy, Germany or Spain. Today, the French government is still divided on the question of the taxation of the largest fortunes. Still, in addition to Philip Lane, several millionaires, present in Davos in January 2023 or signatories of the tribune published on Tuesday, March 14, have already formulated their agreement to be taxed more.

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