The inaugural joint declaration by G20 finance leaders, pledging cooperation on taxing the world's largest fortunes, glossed over underlying disagreements about the appropriate platform to push the agenda forward. On Friday, finance ministers and central bankers from the Group of 20 major economies concurred to include the fair taxation of "ultra-high-net-worth individuals" in both their joint communique and a separate declaration on international tax cooperation.
"We will seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed," stated the final draft of the G20 ministerial declaration in Rio de Janeiro, as seen by Reuters. Yet, divisions have surfaced regarding whether these discussions should take place at the United Nations or through the Organization for Economic Cooperation and Development (OECD), an alliance of wealthier democracies established by U.S. and European allies.
U.S. Treasury Secretary Janet Yellen, speaking to Reuters on the margins of the G20 meeting, expressed her belief that the OECD, which has led negotiations on a two-part global corporate tax deal for the past three years, is better equipped to conduct such talks. "We don't want to see this shifted to the UN," Yellen remarked, noting that the OECD "is a consensus-based organization. We've made significant progress, and the UN lacks the technical expertise to handle this."
Developing nations have shown dissatisfaction with this stance, according to an official who suggested that Brazil, under its G20 presidency, should promote discussions at both the UN and OECD. Prominent advocates for a global minimum tax on billionaires, such as Nobel laureate Joseph Stiglitz, argue that the UN is the correct forum for global tax cooperation.
Oxfam International's Tax Policy Lead Susana Ruiz called on G20 leaders to align with the UN's progress and establish a democratic process for setting global standards on taxing the ultra-rich. "Entrusting this task to the OECD — the club of mostly rich countries — would simply not be sufficient," she added. Brazilian Finance Ministry official Guilherme Mello highlighted that the UN Framework Convention on International Tax Cooperation represents a win for developing nations seeking better representation, as most are not OECD members.
Mello acknowledged both the OECD and the UN as valid forums and noted that the ongoing discussion on effectively taxing the super-rich is a step forward, regardless of the venue. "The shape this will take depends on many dialogues that will be held," he said. Some observers remain doubtful about the feasibility of a global "billionaire tax" targeting the world's largest fortunes. European officials noted that even the 27-nation European Union lacks bloc-level tax powers, with France initially supporting a global minimum wealth tax while Germany has strongly opposed it.
"It seems that it might be very difficult to advance this," commented a European official at the G20 meetings.
