Around 213 billion euros more per year for the public coffers of the EU-27: this would be the potential impact of a tax of 1.7 to 3.5 percent on the top 0.5 percent. rich, according to a new study by the Greens in the European Parliament.
This figure would rise to 272.8 billion euros if combined with the fight against tax evasion by the very rich in secret jurisdictions, such as Bermuda or the Cayman Islands, which the Greens estimate at 59.5 billion euros per year.
The European countries losing the most tax revenue to those who hide their wealth in tax havens are Ireland, Luxembourg and Germany.
“The EU must address loopholes and secrecy laws in jurisdictions around the world that allow European citizens to hide their activities and wealth,” said MEP Kira Peter-Hansen (Greens/EFA).
The study “Taxing the rich: from slogan to reality” simulates the potential implementation of a tax similar to that introduced by Spain in early 2023.
This year, the Spanish solidarity tax, a temporary levy on the rich, raised 623 million euros. However, as in other European countries, the measure has its limits.
Progressive taxes on wealth are not new in Europe. Belgium, Italy and France also have similar programs, but all are “modest” in scope, the report points out.
“In the case of France and Italy, they only target specific asset classes or are applied at a subnational level (Spain), thus decreasing their overall effectiveness in their implementation,” we can read in the report.
And contrary to all myths, the tax would not affect the middle class. In Germany, the tax would be levied from €2,835,533, in France from €3,642,667, while in Poland the threshold would be €749,441.
Even in the worst case, the tax on the richest would only result in 4.8 billion euros less revenue due to an extreme migration response.
“The EU can also start taxing the richest more by introducing minimum taxation for capital gains and tackling tax evasion with a European asset register and tougher measures against tax havens than businesses and individuals use to avoid paying their fair share of tax,” Chiara Putaturo, Oxfam’s tax policy advisor, told EUobserver.
Around half of Europe’s population owns 3.5 percent of total wealth, while the richest 0.5 percent own almost a fifth and have seen their wealth increase by 35 percent over the last decade (adjusted for inflation).
Additionally, men own on average 50 percent more wealth than women, and because women rely more on work income than wealth, they bear a disproportionate tax burden.
This is why taxing the richest is a way to tackle inequalities such as gender inequality, the report underlines, as well as an alternative to increasing the debt burden in EU countries in order to increase their public revenue.
“We can only solve the problems of poverty, social cohesion and climate change if we start to tackle the inequalities in our system,” said Peter-Hansen.
Thanks to revenues from taxing the rich and tracking down assets hidden in tax havens, member states could distribute a check for 1,386 euros per year to European taxpayers.
In other words, these new funds could cover 23 percent of health spending in all countries or increase the education budget by almost 40 percent, the Greens point out.
It would also be a way to finance the green transition, as called for by a European citizens’ initiative registered in June by a group of activists, economists and politicians to introduce a tax on the richest 1% in order to finance the transitions. social and environmental issues of the EU. .
“The richest Europeans must foot the climate bill,” Putaturo said, adding: “After all, a billionaire is, on average, responsible for more than a million times more carbon than the average person.”