Unfair distribution of the burden: the super-rich hardly pay any taxes

Unfair distribution of the burden: the super-rich hardly pay any taxes

The new study from the EU Tax Observatory shows that taxes are collected unfairly around the world. Rich individuals find it more difficult to hide their assets in tax havens. Individual tax evasion has fallen by around two thirds. However, the global minimum tax for multinational corporations has so far been a flop because numerous new loopholes have been created. The biggest problem is that billionaires are hardly taxed because they are allowed to set up holding companies in their home countries and hide their income there. This leads to a blatant injustice that endangers democracy. The proposal is to introduce a global minimum tax on billionaires equal to two percent of their wealth. This could raise almost $250 billion in taxes annually. The study also shows that Germany loses the most revenue from profit taxes, followed by Great Britain, Costa Rica and Hungary. Ireland, the Netherlands, Luxembourg and Switzerland are the most important tax havens in Europe.

For financial professionals, this information has several implications. First, combating individual tax evasion for wealthy individuals can equalize the relationship between taxpayers. This can help make the tax system fairer. Second, the ineffective implementation of the global minimum tax for multinational corporations shows that loopholes and tax evasion continue. Financial professionals must address the impact of these loopholes on global tax fairness. Third, the injustice in taxing billionaires highlights the need for continued reforms to adequately tax wealth. The introduction of a global minimum tax on billionaires could be a first step in this direction. Finally, the losses in profit taxes in various countries and the existence of tax havens show the urgency of international cooperation to combat tax evasion and tax avoidance. Financial experts must analyze the impact of these tax losses on the respective countries and on the global economy and develop solutions to minimize these losses.