Gabriel Zucman (Paris, 37 years old) is as didactic as he is direct.
“The way we tax the rich and multinationals is not sustainable,” he says.
A disciple of Thomas Piketty, winner of the award for the best young economist in France, professor at Berkeley and at the Paris School of Economics, his research is focused on the accumulation, distribution and taxation of global wealth and has become a reference for the progressive left.
“The minimum tax on multinationals will lead to a certain improvement in collection and will address some egregious abuses, but it is totally insufficient,” he comments during an interview at the IE University, in Madrid, where he has traveled to present the latest report on tax evasion. of the EU Tax Observatory, of which he is director.
Ask.
There are millionaires who ask to pay more taxes.
Is society changing?
Answer.
It shows that more and more people realize that the way we tax the rich, the multinationals, is not sustainable.
They are those who have benefited the most from globalization, from the economic growth of recent decades.
And yet they pay less and less in taxes.
On the other hand, while I welcome this move, I believe it is not up to the rich to decide how much taxes they should pay.
I believe it is up to all people to decide, through democratic deliberation and voting.
Q.
And the governments?
Almost all countries have eliminated the wealth tax.
A.
There are two ways to look at it.
One is to say that if most countries have eliminated wealth taxes it is because they do not work.
And it is true that in the past they had all kinds of problems: evasion, tax competition, avoidance... The other way is to try to understand what did not work and how to solve it.
For a long time we tolerated tax evasion.
But now the situation is different, there is an automatic exchange of banking information.
Evasion, avoidance, tax competition are not laws of nature.
They are political decisions and others can be made.
Q.
The latest report from the EU Fiscal Observatory proposes a global wealth tax.
A.
First we must understand the problem.
When you are very rich, it is very easy to avoid income tax.
We saw it with ProPublica
's revelations
about the taxes paid by Jeff Bezos, Elon Musk... It is easy for the super-rich to structure their wealth so that it does not generate much taxable income.
That's why the income tax fails.
It is probably one of the biggest problems with our tax systems and needs to be addressed.
In fact, it is the main recommendation we make in the report, through a minimum tax on the rich.
The question is, a minimum expressed as a fraction of what?
Since the notion of income for the very rich is not very well defined, it should not be expressed in terms of income, but rather in terms of wealth.
Our proposal is to have a minimum tax equivalent to 2% of the wealth of billionaires each year.
It is in line with what has been done in taxation by multinationals.
There is an international agreement on a global minimum tax of 15% that applies in the EU from January 1 of this year.
The next step is to do the same with very rich people.
Q.
And who should design it?
A.
These taxes are best designed in a coordinated manner, but it does not mean that international agreements are always needed.
A country or group of countries can advance unilaterally.
Second, over the past two decades the OECD has led work in the field of international taxation and done important things.
But it has a great limitation, and that is that it is not a global organization.
It only represents 38 high-income countries.
It is important to have truly inclusive negotiating frameworks that take into account the interests of all, including the billions of people in the global South.
Therefore, in the future it would probably be better to have a combination of international organizations.
Q.
The UN is already working on a global fiscal framework.
Does it put the progress of the OECD at risk?
A.
No, I think it complements your work and is a step in the right direction.
It is not good to have a monopoly.
Q.
In the last vote the fracture between North and South was evident.
A.
I think it was a mistake for the OECD countries to vote no or abstain.
They should recognize that it is no longer possible to regulate globalization and taxes only from a very narrow, Western-centric point of view.
Q.
Should the G20 address wealth taxation?
A.
It should and I think it will, because in several countries there is political will.
I'm going to mention two.
One is the United States. Three or four years ago, when he was campaigning in the Democratic primaries, Biden was very against taxes on the rich.
I think he will now make it the cornerstone of his re-election campaign.
Then there is Brazil: it has the G20 presidency this year and knows that we are reaching the end of a cycle when it comes to international taxation.
A new one has to be opened, and they want it to focus on taxation of the rich.
These issues will occupy the center of the international political debate in the coming years.
Zucman during the interview this Monday in Madrid.Álvaro García
Q.
So the challenge is to design it well.
A.
The challenge is to learn from the mistakes of the past.
Governments tolerated tax evasion and competition.
The wealth taxes that existed were archaic, in the sense that people had to declare their wealth themselves.
What we propose is that, first, billionaires be taxed.
Most of their wealth is shares of listed companies, and if not their value can be estimated by looking at how the market values similar companies that are listed on the stock market.
The automatic exchange of banking information makes it more difficult to hide assets in tax havens.
Governments know a lot about the wealth of the rich.
Lastly, but perhaps most importantly, tax competition must be addressed.
Some countries will try to attract the rich, who are free to move wherever they want.
The others should collect the taxes that the tax havens decide not to collect, be
collectors
of last resort.
It is an important idea, which already exists in the agreement on the tax on multinationals.
We have to apply this logic to the rich.
Q.
Don't all these taxes have the risk of discouraging growth and slowing the generation of wealth?
A.
The fundamental driver of economic growth has been and will continue to be access to high-quality education and health for all, good public infrastructure.
Additionally, there is a significant need for revenue to address climate change.
These investments will only be sustainable if the taxes that finance them are collected fairly.
Of course the way they are collected has had an impact on economic growth.
It is also crucial in the dynamics of inequality.
They are matters of the first order in terms of public policy.
Without taxes, no collective action is possible.
There is no society.
Choosing and deciding how those taxes are collected is probably the most important democratic issue we all face as citizens and voters.
Q.
The EU has started to apply the minimum rate to multinationals of 15%.
What expectations do you have?
A.
It is a step in the right direction and a milestone in the regulation of globalization.
It will lead to some improvement in multinational tax collection and address some egregious abuses, but it is also wholly insufficient.
The 15% rate is very low and in practice companies could pay less.
For example, if they have a sufficient presence in a tax haven, the corresponding profits may be excluded from the minimum tax.
It is a very perverse idea because it gives incentives to move real production to places with low taxes and will exacerbate international tax competition.
What we show in the report is that, compared to a deal without loopholes, the current deal will generate only half the revenue that could be expected.
It's the glass half full or half empty, depending on how you look at it, but at least there it is.
Nothing prevents a country like Spain or a group of countries from saying 'for us 15% is not enough and it will be 20% or 25%', making it more ambitious.
Q.
And pillar 1 [taxing part of the profits of the largest companies in the world] is dead?
A.
Yes, because it is only for a handful of companies, about 70-80, most of them in the US and China, that do not want to apply the agreement.
It has no path in the near future, but it is not the end of the world.
Improving the minimum rate will also address the problems that exist in digital industries.
Q.
Can international taxation be changed without the United States?
There are the largest companies in the world and also the richest on the planet.
A.
Absolutely.
Q.
So will it be possible in the future to put an end to tax havens and tax avoidance and evasion?
A.
There is an opinion that you cannot have globalization without tax havens, and it is an erroneous view.
There can always be countries that play the role of collectors of last resort.
If Spain decides that it wants multinationals to pay at least 25%, it can calculate the fiscal deficit of each multinational that has access to its market, defined as the difference between what they are taxed globally and what they would have to pay if they were subject to a minimum tax of 25% in each country where they operate.
Some will pay at least 25% everywhere and won't have any extra tax in Spain, but those that won't?
Spain could raise a fraction of its fiscal deficit.
For example, if Apple has a global fiscal deficit of 10 billion and makes 10% of its global sales here, Spain could say: 'If you want to continue having access to our market, you must pay 10% of 10 billion, 1 billion additional euros in taxes'.
The logic is very simple: market access must be linked to minimum taxation.
Q.
And there is no risk that he leaves Spain?
A.
No. The tax depends on what the company is taxed abroad and where your clients are located.
Even Apple, with all its power, can move its profits, its offices, but fortunately it cannot move its customers.
Q.
How much does ideology or the fear of losing votes weigh in government decisions on fiscal policy?
A.
I do not want to downplay the role of ideology and the many powerful economic actors who have an interest in maintaining the
status quo
.
But I don't think that's the real heart of the problem.
The main reason we have made so little progress is because most people are convinced that nothing can be done alone in a globalized world.
That view is wrong.
Most of the work of the EU Fiscal Observatory consists of explaining in a very concrete and practical way why this vision is wrong, what unilateral measures can be implemented, showing that globalization and European economic integration can be reconciled, on the one hand , with fair and progressive taxation, on the other.
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