Former heads of state and government urge G20 leaders to support taxing the ultra-rich

Nearly 20 former heads of state and government from G20 and high-income countries, including former Swedish Prime Minister Stefan Löfven, former Chilean President Michelle Bachelet, former Australian Prime Minister Julia Gilliard, former French Prime Minister Dominique de Villepin and former Spanish President José Luis Rodríguez Zapatero, are calling on current G20 leaders -including US:President Joe Biden, German Chancellor Olaf Scholz and UK Prime Minister Keir Starmer- to support a new global agreement to tax the world's ultra-rich individuals in an open letter published July 11, 2024. Ensuring the ultra-rich pay their fair share would reduce inequality and generate trillions of dollars necessary for investment in industrial policy and a just transition.

The former leaders write in the letter that "Brazil's G20 proposal underscores the opportunity to write a new story on taxation for the first time in a generation" at a time when billionaires globally pay a tax rate equivalent to less than 0.5% of their wealth.

The Brazilian government, in its role as chair of the G20, is pushing for a new global tax standard to tax the ultra-rich. The letter from former heads of state and government of G20 countries comes as talks are underway in G20 capitals to support the agreement, and ahead of a meeting of G20 finance ministers and central bank governors in Rio de Janeiro, Brazil, on July 25. Governments including Brazil, South Africa, France and Spain have already expressed their support.

"Rarely does a proposal come along that asks us as former leaders to come together in unity - and that we recognize as politically possible. This is clearly such a proposal."

Stefan Löfven, former Prime Minister of Sweden and member of the Club de Madrid, said:

"Brazil's reasonable proposal to set new global standards for taxing the wealthiest individuals is a strategic economic game-changer that all G20 leaders must support. With leaders like President Biden pushing for bold new proposals, we are witnessing a groundbreaking shift. But for these efforts to be truly effective, governments must cooperate internationally.

"The leaders of the world's most powerful economies are uniquely placed to offer the leadership that people are crying out for today. Supporting Brazil's credible G20 proposal could be one of the most important multilateral steps in modern history: it would not only generate billions of dollars for countries' vital investments in people, but also offer the new global consensus the world needs for fairer taxation."

Michelle Bachelet, former President of Chile and Vice President of the Club de Madrid, said:

"Brazil's proposal for a global agreement to tax the richest people is the kind of responsible economic statesmanship that governments need today. By supporting this agenda, G20 leaders would show that they are addressing oligarchic levels of extreme inequality and the damage to democracy that this creates.

"We need a world where the richest are taxed in every country, and not allowed to dictate the rules to their own advantage. Brazil is showing us how. By supporting President Lula's G20 initiative, leaders are giving multilateral cooperation a chance: to prove that governments can work together to create fair rules for all."

The former world leaders note that "global capital does not respect national boundaries," noting that while national action is essential, it alone can only go so far. The former presidents and prime ministers write that "tax evasion and tax avoidance by the ultra-rich succeed when governments fail to cooperate."

Helen Clark, former Prime Minister of New Zealand and member of the Club de Madrid, said:

"Brazil is to be commended for bringing the issue of a global tax standard for the world's billionaires to the G20 table. This builds on an earlier G20 decision to support a 15% global minimum tax for multinationals. The latter initiative took years to materialize. Both initiatives are based on global cooperation to fight tax evasion."

The letter, coordinated by Club de Madrid and Oxfam, warns that "the share of income of the top 1 percent of income earners has increased by 45 percent over four decades while the top tax rates on their incomes have fallen by about a third."