Treasury Secretary Janet Yellen expressed her disapproval of a proposal that seeks to introduce a global wealth tax targeting the wealthiest billionaires.
The proposal, spearheaded by Brazil, aims to deter the ultrawealthy from evading taxes by relocating their assets to lower-tax regions. This initiative is also supported by officials in Germany, Spain, and South Africa.
“We believe in progressive taxation. But the notion of some common global arrangement for taxing billionaires with proceeds redistributed in some way — we’re not supportive of a process to try to achieve that,” Yellen stated, according to the Wall Street Journal. “That’s something we can’t sign on to.”
Under President Joe Biden, the United States has backed a 15% global corporate minimum tax, though challenges remain in its implementation domestically.
The U.S. possesses the highest share of global billionaires. As of 2024, Forbes reports a record 2,781 billionaires worldwide, with 813, or nearly 30%, residing in the U.S. China follows with 406 billionaires, worth approximately $1.3 trillion.
Despite U.S. opposition, Yellen is set to meet with finance ministers from the Group of Seven this week to discuss the global wealth tax proposal.
“This is exactly what we did with minimum taxation on corporate tax,” noted French Finance Minister Bruno Le Maire. “It would be the same on the international taxation for the wealthiest individuals.”
In its latest budget proposal, the White House has also advocated for a 25% minimum tax on domestic billionaires.
This tax would impact only the wealthiest 0.01% of taxpayers and is estimated to generate approximately $500 billion over the next decade, according to the White House.
Biden has proposed a variety of other domestic tax changes, though their future appears uncertain given Republican control of the House and a narrowly divided Senate.
The president’s budget includes a proposal to increase the corporate tax rate from 21% to 28%, a change he has pursued for years. The corporate tax rate was previously reduced from 35% to 21% under the tax cuts championed by former President Donald Trump in 2017.
Biden also aims to raise the corporate minimum tax from 15% to 21% and implement stricter limits on corporate deductions for high-paid employees’ wages, as per the White House.
Additionally, Congressional Democrats have proposed legislation targeting the ultrawealthy.
Sen. Ron Wyden (D-OR) has long advocated for a mark-to-market tax on wealth and introduced a bill last year targeting individuals with net worths exceeding $1 billion, as well as high earners making over $100 million for three consecutive years.
The Wyden plan represents a significant shift in federal tax policy by imposing taxes on the unrealized gains of assets like stocks and bonds for the wealthiest individuals.
Despite its ambition, the Wyden mark-to-market proposal faces opposition from centrist Democrats. In 2021, when the idea was first introduced, Sen. Joe Manchin (D-WV) voiced his disapproval.
“I don’t like it,” he commented. “I don’t like the connotation that we’re targeting different people as people that — basically, they contributed to society and create a lot of jobs and a lot of money and give a lot to philanthropic pursuits.”
