In the News Teaching Activity: A Minimum Tax for Billionaires? (Oct 2023)
The EU Tax Observatory have suggested that billionaires should face a minimum tax rate to reduce inequality.
Have a go at this free teaching activity, which includes a downloadable worksheet and suggested answers.
The EU Tax Observatory has proposed a minimum 2% tax rate for billionaires, aiming to address tax avoidance among the super-rich who use loopholes in tax rules to avoid paying tax.
This initiative could generate approximately $250 billion every year from around 2,500 billionaires with a combined wealth of $13 trillion. It is hard to believe this move would make a major dent in the lifestyles of the super-rich, but it could generate some much-needed tax revenue to pay for improvements in public services, for example.
Nobel Prize-winning economist Joseph Stiglitz has expressed concern that there is a threat to democracy when tax disparities erode trust in institutions and exacerbate inequality.
Read the article and then answer the following questions.
- What is the difference between tax avoidance and tax evasion? How do wealthy individuals and large companies avoid paying tax?
- Economists often use the Gini coefficient to measure inequality. How is the Gini coefficient calculated?
- Stiglitz argues that tax avoidance by the rich is a problem for the economy and society. Discuss why is income and wealth inequality are a cause for concern.