Billionaires should face a minimum tax rate, a new report suggested after it found that some of the world’s mega-wealthy people are paying little to no tax. Researchers at the European Union (EU) Observatory said that most people pay a higher tax rate than the super-rich, who, according to them, are able to use complex business structures for avoidance. They suggested a minimum 2% tax rate on billionaires’ global health would raise $250 billion a year. 

According to the report, there are around 2,500 billionaires worldwide with a combined wealth of $13 trillion. Therefore, the researchers said the number of taxpayers affected by this proposal would be “very small” and they would be paying a “very modest” tax rate. 

“Even so, the revenue potential is large, due to the concentration of wealth at the top of the distribution and the low current tax rates of billionaires,” the researchers wrote in the report.

The EU Tax Observatory is a research laboratory co-funded by the European Union and based at the Paris School of Economics. According to the BBC, Its researchers said that the automatic sharing of the wealthy’s account information across more than 100 countries had significantly reduced offshore tax evasion. However, they also added that billionaires are still able to get away with paying tax rates equal to 0% or 0.5% of their wealth “due to the frequent use of shell companies to avoid income taxation”. 

The researchers commended an agreement in 2021 between 140 different countries to make sure companies pay at least 15% in corporation tax, but they also said that the plan had been “dramatically weakened” since then by a “growing list of loopholes”.

Currently, the world’s billionaires collectively pay around $44 billion a year in individual income taxes and wealth taxes, the researchers wrote. Introducing a 2% minimum wealth tax would boost this by about $214 billion, they estimated.

“It is time to establish a global minimum tax on the very rich,” Joseph Stiglitz, an economist, scholar, and Nobel Prize winner, wrote in the report, adding, “This may seem impossible to attain, but so was undermining bank secrecy and introducing a minimum tax on corporations just a few years ago.”

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Further, citing previous studies, the researchers said that billionaires have “very low” individual income taxes and wealth taxes. “When expressed as a fraction of income and considering all taxes paid at all levels of government beyond personal taxes … the effective tax rates of billionaires appear significantly lower than those of all other groups of the population,” they wrote.

The researchers also explained the reason why billionaires generally have low effective tax rates. According to them, billionaires in many countries use personal wealth-holding companies to distribute dividends and avoid paying income taxes. 

“So many people struggle to make ends meet yet pay the taxes their governments ask of them,” Mr Stiglitz continued. “We need to make sure those at the top of the income ladder who certainly have the financial means don’t wriggle out of them. Glaring tax disparity undermines the proper functioning of our democracy; it deepens inequality, weakens trust in our institutions, and erodes the social contract,” he added. 

Other measures that the researchers called for included increasing the minimum corporate tax rate to 25% and removing loopholes from it, creating a global asset registry, and introducing mechanisms to tax wealthy people who have been long-term residents in a country and move to a low-tax country. 

Secretary of State Antony Blinken on Tuesday warned Iran that the United States would respond “decisively” to any attack by its proxies, as tensions rise with the Israel-Hamas war.

“The United States does not seek conflict with Iran. We do not want this war to widen. But if Iran or its proxies attack US personnel anywhere, make no mistake. We will defend our people, we will defend our security — swiftly and decisively,” Blinken told a UN Security Council session.

The United States has accused Iran of assisting a renewal of attacks on US forces based in Iraq as part of a coalition against the Islamic State group.

Iran’s clerical leadership supports Hamas, which carried out a bloody assault on October 7 inside Israel which has responded with massive retaliation. Iran also has a close relationship with Lebanon’s Shiite militia Hezbollah which has had repeated conflicts with Israel.

The United States, the top diplomatic backer of Israel, last week vetoed a draft resolution on the conflict, saying it should have explicitly defended Israel’s right to self-defence.

The United States has put forward a new resolution seen by AFP that would voice sympathy for both Israeli and Palestinian casualties and defend “the inherent right of all states to individual and collective self-defence” while complying with obligations under international law.

The new resolution “incorporates substantive feedback that we received from fellow Council members over recent days,” Blinken said.

Sharing graphic accounts of Hamas militants killing children and other civilians, Blinken asked, “Where’s the outrage? Where’s the revulsion? Where’s the rejection? Where’s the explicit condemnation of these horrors?”

“We must affirm the right of any nation to defend itself and to prevent such harm from repeating itself. No member of this Council —  no nation in this entire body — could or would tolerate the slaughter of its people,” Blinken said.

A full ceasefire in Gaza would only help Hamas as Israel wages an air campaign against the militant group, but humanitarian “pauses” should be considered to let vital aid in, the White House said Tuesday.

The comments came as President Joe Biden said aid deliveries to the Palestinian enclave, under Israeli bombardment since the deadly Hamas attacks of October 7, were “not fast enough.”

“A ceasefire right now really only benefits Hamas,” National Security Council spokesman John Kirby told journalists.

Thousands of people have been killed on both sides since Hamas militants stormed across the border, executing civilians and seizing hostages, with Israel retaliating with relentless strikes on the Gaza Strip.

UN chief Antonio Guterres earlier Tuesday urged an immediate ceasefire in Gaza, as European Union leaders were considering a call for a pause in the fighting.

Kirby said that while Washington opposed a full ceasefire, stoppages in the fighting to facilitate the delivery of aid was “something that ought to be considered.”

“We want to see all measure of protection for civilians and pauses in an operation is a tool and a tactic that can do that for temporary periods of time,” he said.

“It’s not the same as saying a ceasefire.”

US Secretary of State Antony Blinken earlier asked the UN Security Council to support a new US-led resolution on the conflict that would back “humanitarian pauses” to let in aid but not a full ceasefire.

Biden said Monday that “talk” about any ceasefire could only start once all of the more than 200 hostages taken by Hamas in the attack were released.

Kirby meanwhile warned that while the United States had urged Israel to minimize civilian casualties, some were inevitable.

“This is war. It is combat. It is bloody, ugly and it’s going to be messy and innocent civilians are going to be hurt going forward,” Kirby said.

“I wish I could tell you something different and wish that there wasn’t going to happen, but it is going to happen. And that doesn’t make it right, doesn’t make it dismissible.”

Israel was left stunned and furious by the bloody attack on southern communities in which it says Hamas killed more than 1,400 people and took the hostages, including some Americans.

Israel has responded with heavy air and artillery strikes that have killed 5,791 in Gaza, according to the Hamas-ruled health ministry, and plunged the Palestinian territory into a dire humanitarian crisis.