Lawmakers Want Biden, Yellen to Back Global Tax on Ultrawealthy

NEWS: Sanders, Omar, 16 Colleagues in Senate and House Call on President Biden and Treasury Secretary Yellen to Support a Global Tax on the Ultrawealthy

June 11, 2024

WASHINGTON, June 11 — Sen. Bernie Sanders (I-Vt.) and Congresswoman Ilhan Omar (MN-05), along with 16 of their colleagues in the Senate and House, today urged President Biden and Treasury Secretary Janet Yellen to support Brazil’s historic G20 initiative to establish a global minimum tax on the world’ ultrawealthy. The letter comes ahead of the G20 meetings this July during which Brazil, the current president of the G20, will reportedly push for a joint declaration on the initiative. The proposal has already gained provisional support from leading economists, global civil leaders, and a number of countries, including France.

“We write to urge your administration to support an important initiative at the G20 to foster international cooperation on taxation of ultrawealthy individuals,” wrote the members. “This is a historic opportunity for the United States to provide global leadership on tax fairness and also strengthen the administration’s vital domestic efforts to achieve a fairer tax system. . . We encourage your administration to join others in pledging support for this effort, and to help lead the G20 to a historic agreement that will secure a more equitable U.S. and global economy.”

In recent decades, the richest 1% of earners in the G20 have seen their top tax rates fall by roughly a third, while their share of national income increased by 45%, according to Oxfam. Over the next decade, countries around the world could lose up to $4.8 trillion in tax revenue due to tax havens, according to a 2023 study by advocacy group Tax Justice Network. Exposés such as the Panama Papers Leak, the Paradise Papers, and ProPublica’s IRS files investigation continue to bring to light the pervasiveness of the ultrawealthy gaming the system, both in the U.S. and across the globe, to avoid paying their fair share in taxes.

“Every tax dollar not paid by a billionaire could have been used to invest in our communities, address climate change, and support public goods — from education to health care to infrastructure — that are critical to prosperity and a strong economy,” wrote the members.

Brazil's G20 proposal presents an unprecedented opportunity for much-needed international cooperation to address the global failure to tax the ultrawealthy, depriving governments and communities of resources and contributing to extreme concentrations of wealth. This proposal — which focuses on individual taxation — builds on the meaningful advances made by the landmark 2021 agreement by more than 130 countries on a global framework for corporate taxation.

The letter argues that support for the initiative from the Biden Administration would not only strengthen America's global leadership on any number of intersecting issues, but also help the administration's domestic efforts to achieve a fairer tax system at home — including Biden's plan for a 25% minimum income tax on the ultrawealthy.

Sanders and Omar are joined on this letter by Sens. Elizabeth Warren (D-Mass.), Ed Markey (D-Mass.), Peter Welch (D-Vt.), and 13 members in the House. It is endorsed by a number of leading organizations and academics, including: AFL-CIO, Americans for Financial Reform, Americans for Tax Fairness, Community Change, Groundwork Collaborative, Oxfam America, Patriotic Millionaires, Public Citizen, and Take on Wall Street.

Professor Joseph Stiglitz, Nobel Economics Prize Laureate, said: “Backing Brazil's G20 initiative would go a long way to supporting President Biden and Secretary Yellen's efforts to tax the ultra-rich and reduce today's extreme levels of inequality. Making sure that billionaires pay their fair share of taxes and setting global minimum standards across countries will make it harder for the ultra-rich to hide their money and enable the U.S. and other countries to raise billions of dollars to combat inequality.”

Read full letter here.

---

June 11, 2024

The Honorable Joseph R. Biden
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500

The Honorable Janet Yellen
U.S. Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220

President Biden and Secretary Yellen:

We write to urge your administration to support an important initiative at the G20 to foster international cooperation on taxation of ultra-wealthy individuals. This is a historic opportunity for the United States to provide global leadership on tax fairness and also strengthen the administration's vital domestic efforts to achieve a fairer tax system.

We agree with you that it is time for the very wealthiest to pay their fair share. Data shows the very richest billionaires in the United States pay an effective income tax rate of 8.2%.¹ The U.S. is far from alone. Researchers estimate that billionaires in other countries pay as little as 2% of their income in taxes, and that globally billionaires pay a rate equivalent to between 0 and 0.5% of their wealth.² Every tax dollar not paid by a billionaire could have been used to invest in our communities, address climate change, and support public goods — from education to healthcare to infrastructure — that are critical to prosperity and a strong economy.

This is why we commend your efforts to build a more just tax system, including your proposed minimum tax on billionaires,³ and your administration's revenue-generating⁴ steps to tackle avoidance by high earners.⁵ It is also why we support legislative proposals that would end the scandal of billionaires paying a lower rate than working-class families, combat economic inequality, and help achieve racial, gender, and climate justice.

This year Brazil, which holds the G20 presidency, is calling for action on the taxation of wealthy individuals. They aim for increased cooperation between G20 countries to support tax progressivity and ensure the world's richest people pay their fair share. This could involve coordinated standards, information sharing, or a global minimum floor for taxation of the wealthy that could in theory be satisfied by many of the leading proposals to raise taxes on the ultra-rich, including the billionaire minimum income tax. We have seen how international cooperation on taxation can deliver meaningful advances, as demonstrated by the landmark 2021 agreement by more than 130 countries to create a global tax framework on corporate taxation.⁶ This is a chance to build on what was learned and deliver better results by working together, but with a focus on individuals instead of corporations.

We believe that Brazil's G20 initiative is in the strategic interest of the United States. International cooperation will strengthen domestic efforts to tax the wealthiest, including those that you and many of us in Congress have championed. Coordinated standards can help tackle tax avoidance and evasion by ultra-wealthy individuals. Additionally, your administration's strong track record on these issues means the United States has a valuable role to play, lending leadership and expertise in support of a truly global effort that has the backing of top economists and civil society, and our close international allies.

We encourage your administration to join others in pledging support for this effort, and to help lead the G20 to a historic agreement that will secure a more equitable U.S. and global economy.

Sincerely,

Ilhan Omar
Member of Congress

Bernard Sanders
United States Senator

Pramila Jayapal
Member of Congress

Elizabeth Warren
United States Senator

Steve Cohen
Member of Congress

Peter Welch
United States Senator

Summer L. Lee
Member of Congress

Edward J. Markey
United States Senator

Barbara Lee
Member of Congress

Rashida Tlaib
Member of Congress

Cori Bush
Member of Congress

Greg Casar
Member of Congress

Eleanor Holmes Norton
Member of Congress

Bonnie Watson Coleman
Member of Congress

Jonathan L. Jackson
Member of Congress

Alexandria Ocasio-Cortez
Member of Congress

Raúl M. Grijalva
Member of Congress

Jesús G. "Chuy" García
Member of Congress