G20 nations agree to work together towards taxing super rich

G20 nations have agreed to work together to make the super-rich pay their taxes, but stopped short of a more substantial deal, according to a declaration adopted Friday after a meeting of finance ministers in Rio de Janeiro, Brazil, AFP reported.

The thorny topic of tackling tax-dodging billionaires dominated the two-day meeting in the Brazilian city, which will host the next G20 summit in November.

India, which has at least 200 billionaires, is currently debating this tax reform after a research paper co-authored by economist Thomas Piketty recently proposed a 2% tax on net wealth exceeding Rs 10 crore and a 33% percent inheritance tax, and a recent survey found over 74 percent citizens supporting a tax on the rich, to deal with the rising income inequality issue in the country.

The initiative to tax the super rich is a key priority for Brazilian President Luiz Inacio Lula da Silva, who heads this year’s G20 grouping, which includes the world’s major economies.

Lula was hoping for a minimum tax on the moneyed elite, but the final statement represents a compromise on a topic that divided member states.

“With full respect to tax sovereignty, we will seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed,” said the statement.

“Wealth and income inequalities are undermining economic growth and social cohesion and aggravating social vulnerabilities.”

Brazil’s Finance Minister Fernando Haddad said that “from a moral point of view it is important that the twenty richest nations consider that we have a problem, which is to have progressive taxation on the poor and not on the rich.”

The United States and Germany dismissed the need for a global deal on taxing billionaires, an initiative which is backed by France, Spain, South Africa, Colombia and the African Union.