Millionaires group calls for wealth tax at WEF's virtual Davos summit

A photo from May 17, 2021, showing members of the Patriotic Millionaires protesting outside the apartment of Amazon founder Jeff Bezos in New York.

ZURICH - A group of more than 100 billionaires and millionaires has issued a plea to political and business leaders convening virtually for the World Economic Forum: Make us pay more tax.

The group calling itself the Patriotic Millionaires said that the ultra-wealthy were not currently being forced to pay their share of the global economic recovery from the pandemic.

"As millionaires, we know that the current tax system is not fair. Most of us can say that, while the world has gone through an immense amount of suffering in the last two years, we have actually seen our wealth rise during the pandemic - yet few if any of us can honestly say that we pay our fair share in taxes," the signatories said in an open letter, published on the occasion of the World Economic Forum's "virtual Davos", which began on Jan 17.

Reuters reported last year on the staggering rise in billionaires' wealth in 2020 as the world went into lockdown and the global economy faced its worst recession since World War II, prompting the millionaires' group to call for higher taxes.

While that spurred more than 130 countries to agree a deal to ensure big companies pay a global minimum tax rate of 15 per cent, aimed at making it harder for them to avoid taxation, the millionaires said the wealthy still needed to contribute more.

Over the course of the two years of the pandemic, the fortunes of the world's 10 richest individuals have risen to US$1.5 trillion (S$2.03 trillion) — or by US$15,000 a second — a study by charity Oxfam this week showed.

In the letter, the signatories, including Disney heiress Abigail Disney and venture capitalist Nick Hanauer, told Davos participants convening for a week of online power-brokering and talks: "You're not going to find the answer in a private forum... you're part of the problem."

A spokesman for the World Economic Forum said paying a fair share of taxes was one of the forum's tenets, and a wealth tax — as exists in Switzerland, where the organisation is based — could be a good model to deploy elsewhere.

In most countries, other than a handful in Europe and some recent joiners in South America, the rich do not have to pay annual taxes on assets such as real estate, stocks or artwork, because they are taxed only when the asset is sold.

According to a study conducted by the Patriotic Millionaires together with Oxfam and other non-profits, a progressive wealth tax starting at two per cent for those with more than US$5 million, and rising to five per cent for billionaires, could raise US$2.52 trillion, enough globally to lift 2.3 billion people out of poverty and guarantee healthcare and social protection for individuals living in lower-income countries.

The World Bank in 2021 published an article urging countries to consider a wealth tax to help reduce inequality, replenish state coffers depleted by Covid-19 relief schemes and regain social trust.

However, apart from Argentina and Colombia, no new wealth tax schemes have been initiated since the start of the pandemic.