Plan to tax super-rich divides at G20 meet

RIO DE JANEIRO, Brazil — Brazil's vision for a global deal to tax the ultra-rich sparked divisions Thursday at a meeting of G20 finance ministers in Rio de Janeiro, where Washington dismissed the need for an international accord on the matter.

The initiative, discussed at an afternoon meeting, is a key priority for Brazil's leftist president Luiz Inacio Lula da Silva, who this year heads the G20 grouping of the world's major economies, the European Union and the African Union.

Even before talks began, US Treasury Secretary Janet Yellen dampened the mood by saying there was no need for a global agreement on taxing billionaires.

"Tax policy is very difficult to coordinate globally," she told journalists. "We think that all countries should make sure that their taxation systems are fair and progressive."

However, those backing the plan saw having it on the agenda as a key first step.

After the meeting, Brazil's Economy Minister Fernando Haddad expressed his confidence in the initiative, and said a final "declaration" to be published Friday would mark a "first step."

This communique will take up the "Brazilian proposal to start looking at international taxation, not only from the point of view of companies, but also from the point of view of individuals called the super-rich."

According to a draft of the declaration seen by AFP, G20 members would "seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed."

"Wealth and income inequalities are undermining economic growth and social cohesion and aggravating social vulnerabilities," read the text of the draft.

It added that international cooperation could help promote "fair, and progressive tax policies" without mentioning any taxes negotiated at the international level.

One participant at the meeting, speaking on condition of anonymity, told AFP: "There is no consensus today to create a global tax on the capital of multimillionaires."

"The idea is to have the theme on the agenda and the first steps discussed."

Brazil's search for a global agreement on taxing the richest of the rich is backed by France, Spain, South Africa, Colombia and the African Union.

"Some individuals