Open letter to G20 leaders
September 9, 2023: While the rockstars of world politics such as Joe Biden, Rishi Sunak, and Justin Trudeau will go through the rigmarole of the G20 Summit in shiny suits this weekend in Dilli, voices from the deprived world will be ringing in their ears.
As many as 300 economists, political activists, and human rights campaigners have come together and issued a scathing open letter addressing the G20 leaders ahead of their discussions at the Pragati Maidan, the venue of the gathering of the political elites. The concerned group has called upon the representatives of the G20 nations to take urgent action against escalating inequality and gross income disparity by judiciously bringing back wealth taxes.
The open appeal is titled ‘G20 Leaders must tax extreme wealth’, and it has been signed by renowned economists Jayati Ghosh, Joseph Stiglitz, Thomas Piketty, among many others. The list of 300 prominent signatories includes Maria Fernanda Espinosa, the 73rd President of the UN General Assembly, Abigail Disney, who is Disney heiress and an American social activist, and US senator Bernie Sanders, a labour rights campaigner.
On September 9 and 10, the G20 leaders are expected to hold cosmetic discussions on burning international issues that they otherwise usually ignore – such as economic revival, wars, inequality, migration, outbreaks, and the ever-changing climate.
Xi Jinping and Vladimir Putin are the most high-profile G20 leaders who are skipping this year’s summit. Their absence sparked speculation about possible issues that China and Russia might have with some other countries at the G20 party, such as geopolitical bully, the US. But there will still be enough superficial action for the mainstream media to feast upon.
G20 leaders face wealth tax call
In the sternly worded letter addressed to the G20 leaders, the signatories have collectively said, “The accumulation of extreme wealth by the world’s richest individuals has become an economic, ecological, and human rights disaster, threatening political stability… all over the world.”
They argued that the global population is in an unprecedented need for the richest class to halt cornering much of the financial wealth. “For the first time in decades, extreme poverty is increasing, and nearly two billion people live in countries where inflation has outstripped wage growth,” they wrote.
“As economists, millionaires, and political representatives, we agree: we cannot allow extreme wealth to continue corroding our collective future,” wrote Ghosh, Stiglitz, Piketty, and Co.
The signatories have called upon the G20 leaders to work out an international agreement on wealth taxes, arguing that it would drastically shrink dangerous levels of financial inequality, and also help raise fresh funds that could be used to fix multiple problems around the world.
As of January this year, the richest 1% of the global population cornered two-thirds of all new wealth worth $42 trillion that was generated since 2020. During the past 10 years, the richest 1% cornered around half of all new wealth.
A missed opportunity?
Around the same time, an Indian platform comprising economic watchdogs and concerned individuals published an incisive position paper, calling upon the G20 leaders – since they are meeting up this weekend – to impose wealth tax and inheritance tax on the richest 1% of Indians.
The Working Group on International Financial Institutions (WGIFIs) has proposed to G20 leaders in its recently released paper, “It is the need of the hour that a 2% wealth tax and 33% inheritance tax be applied on the top 1% Indians to ensure universal social and economic rights for all.”
In the paper titled ‘G20 and Inequality: A Missed Opportunity’, the WGIFIs presents a demonstration, arguing, “The total wealth of the top 1% of the wealthy in 2021 was about Rs 427 lakh crore. Only a 2% wealth tax on the top 1% could generate about Rs 8.54 lakh crore for the exchequer. Add to it Rs 7.04 lakh crore that we can raise from a 33% inheritance tax on the top 1% rich. That could raise an amount as big as Rs 15.58 lakh crore.”
According to the 2022 Global Hunger Index, Bharat is languishing at the 107th position. The country is home to about 8% of the people around the world living in extreme poverty. The dire situation stands out in stark contrast to the sharp rise in the number of billionaires in the country.
Full text of the open letter:
To the G20 Heads of State,
The accumulation of extreme wealth by the world’s richest individuals has become an economic, ecological, and human rights disaster, threatening political stability in countries all over the world. Such steep levels of inequality undermine the strength of virtually every one of our global systems, and must be addressed head-on.
Decades of falling taxes on the richest, based on the false promise that the wealth at the top would somehow benefit us all, has contributed to the rise in extreme inequality. Our political choices allow ultra-wealthy individuals to continue to use tax shelters and enjoy preferential treatment to the extent that, in most countries in the world, they pay lower tax rates than ordinary people.
At the same time, the world has seldom had more need for the richest to pay. For the first time in decades, extreme poverty is increasing, and nearly two billion people live in countries where inflation has outstripped wage growth. Furthermore, time is rapidly running out for countries to make the necessary green investments that would align themselves with the 1.5 degrees of warming cap called for in the Paris Agreement.
Across the world, people are desperate for change. Public polls in all G20 countries show overwhelming support for political action to curb inequality and tax extreme wealth. A current international petition on wealth taxation has hundreds of thousands of signatures.
As economists, millionaires, and political representatives, we agree: we cannot allow extreme wealth to continue corroding our collective future.
In 2021, the G20 and others worked together to ensure that multinational corporations should pay a minimum level of tax. The G20 must now collectively agree to raise taxes on the richest individuals, through truly inclusive and ambitious international collaboration to tax wealth and to stop tax competition and avoidance by the richest people. Our shared ambition must be to make our international and national systems work for everyone, not merely those who have money and power.
With this in mind, we call on the member states of the G20 to work together to enact new tax regimes – at national and international levels – that eliminate the ability of the ultra-rich to avoid paying their dues, and introduce new rules that determine higher taxation of extreme wealth.
An international agreement on wealth taxes would shrink dangerous levels of inequality while also allowing leaders to raise vital funds to tackle the multiple challenges facing our world.
This will not be easy, but it will be worth it. Much work has already been done. There is an abundance of policy proposals on wealth taxation from some of the world’s leading economists. The public wants it. We want it. Now all that’s missing is the political will to deliver it. It’s time for you to find it.
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