Normal citizens have to pay taxes, but the super-rich can usually avoid them easily. Brazil is committed to a global billionaire tax – but Germany's finance minister is against it.
Washington – It sounds paradoxical: But the richer you are, the less taxes you pay – in Germany and elsewhere. Normal citizens face a greater tax burden than the super-rich - Brazil and France want to reduce this inequality, but Germany's Finance Minister Christian Lindner (FDP) is against it.
Germany: Rich people pay less taxes than middle class
Members of the middle class in Germany pay an average of 43 percent in taxes and social security contributions on their income - a huge burden. For German billionaires, however, the tax rate actually paid has halved over the past 30 years, suggests a new study by the Tax Justice Network, Momentum Institute and Oxfam, which Die
Zeit
reports on. Multimillionaires therefore only pay an average of 29 percent in taxes on their income.
And billionaires have it even better: According to a further analysis by the Tax Justice Network, the two BMW heirs and billionaires Stefan Quandt and Susanne Klatten, with their estimated assets of around 49 billion euros, only paid around 26 percent of their income of almost ten billion euros. This is often not much different in other countries - even if Germany is considered a “high-tax country”.
More taxes for the super-rich: Lindner against it
Brazil, which currently holds the G20 presidency, wants to introduce a special tax for billionaires – worldwide. The South American country wants to present concrete plans for greater taxation of billionaires by July. Brazil wants to add another pillar to the international tax reform that has already been initiated, which consists of two pillars. In the future, super-rich people will have to pay a minimum tax – similar to larger companies. According to Brazil, one of Brazil's priorities in discussions with the 20 leading industrialized and emerging countries (G20) is to reduce the immense inequality in the world.
However, Finance Minister Lindner rejects the plans for greater taxation of super-rich people. The corresponding proposal from the Brazilian G20 presidency is “not suitable,” said the FDP chairman on Thursday in Washington on the sidelines of the IMF spring meeting. There is already appropriate taxation of income. This does not have to be changed through international initiatives. Unlike Brazil, Lindner sees no momentum to reach an agreement in this area.
France and International Monetary Fund for billionaire tax
But France has already signaled support for the idea, and the International Monetary Fund (IMF) has also expressed sympathy. According to one study, a minimum tax on billionaires could raise $250 billion annually. The 2,700 billionaires in the world have a combined fortune of almost $13 trillion.
Lindner pointed out that the introduction of the minimum tax of 15 percent for large corporations has not yet been completed. This step would be an enormous step forward against tax dumping. We need to make further progress here this year.
With material from Reuters