Watch out for a global wealth tax

Treasury Secretary Janet Yellen on Thursday in Washington. PHOTO: EVELYN HOCKSTEIN/REUTERS
Treasury Secretary Janet Yellen on Thursday in Washington. PHOTO: EVELYN HOCKSTEIN/REUTERS

Summary

Will Biden and Yellen buy into the G-20 proposal for a 2% tax on assets?

In our new socialist age, the demand to tax and redistribute income is insatiable. The latest brainstorm arrives in a proposal by four countries in the G-20 group of nations to impose a 2% wealth tax on the world’s billionaires. Don’t think this couldn’t happen.

“The tax could be designed as a minimum levy equivalent to 2% of the wealth of the super-rich," write economic ministers of Germany, Spain, Brazil and South Africa in the Guardian. They say the levy would raise about $250 billion a year from some 3,000 billionaires and “would boost social justice and increase trust in the effectiveness of fiscal redistribution." The countries plan to float this at the next G-20 meeting in June.

As you might expect, this would principally be a tax raid on Americans, who are the most numerous billionaires. It would also be taxation without representation, since it would be a body of global elites attempting to impose a tax without having passed Congress.

Presumably, the plan is to have the G-20 endorse the idea, including President Biden and Treasury Secretary Janet Yellen. Then negotiate a global tax deal that would wait until Democrats control all of the U.S. government to approve it, even if that takes many years.

That’s more or less what Ms. Yellen has done with her global minimum tax on corporations, and the four ministers are candid in saying this is their model. The wealth tax “is a necessary third pillar that complements the negotiations on the taxation of the digital economy and on a minimum corporate tax of 15% for multinationals," the ministers write.

Ms. Yellen went along with the first two pillars, though as we’ve written they subject American companies to foreign tax raids of the kind the U.S. government has long opposed. An architect of the wealth tax idea is French socialist Gabriel Zucman, who was also behind Ms. Yellen’s global minimum tax. Once a global wealth tax is in place, you can be sure that billionaires won’t be the last target.

The wealth-tax proposal underscores the growing danger from the G-20, which is increasingly at odds with U.S. interests. Founded in 1999 after the Asian debt crisis, the G-20 is becoming a vehicle for the world’s left-wing governments to gang up on the U.S. Germany and Spain are run by parties of the left, and the governments in Brazil and South Africa are overtly anti-American.

The Biden Administration is run by liberal internationalists who are happy to cede more power to multilateral institutions. President Biden is also campaigning on a wealth tax of his own that would impose the highest tax rates on Americans since before the Reagan tax reform. For this crowd, taxing American billionaires to redistribute income around the world is all too imaginable.

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