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.

Billionaires should face a minimum tax rate, report says (BBC News)

Read the article and then answer the following questions.

1. What is the difference between tax avoidance and tax evasion? How do wealthy individuals and large companies avoid paying tax?
2. Economists often use the Gini coefficient to measure inequality. How is the Gini coefficient calculated?
3. 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.