MEP Aurore Lalucq (S&D, French) and French economist Gabriel Zucman launched, on Tuesday 14 March in an op-ed published in the French paper, Le Monde, a call for fair taxation of the ultra-rich (see EUROPE 13141/33). This call for an international agreement to tax the very wealthy was signed by: - 131 other MEPs; - a dozen economists, including Joseph Stiglitz; - about twenty millionaires, members of the Patriotic Millionaires, authors of the Davos letter; - non-governmental organisations; - European Trade Union Confederation. Aurore Lalucq gives details on this initiative to EUROPE. (Interview by Anne Damiani)
Agence Europe - How did you come up with this idea?
Aurore Lalucq - We have always had this idea at the centre of the social democrats to tax wealth. The idea of creating an international agreement for the implementation of a tax on extreme wealth came about gradually after the issue of taxation of multinationals had been settled through the OECD agreement (see EUROPE 13122/19). It is a logical continuation. There is now tax justice between multinationals and small and medium-sized enterprises (SMEs).
Tax justice in the area of households is also dear to our hearts, because it is just as important. The European Parliament, supported by the European Commission, had requested that household taxation be included in the reform of the Code of Conduct Group, but this was rejected by the EU Council (see EUROPE 13059/5).
The taxation of wealth has been phased out with the neoliberal revolution. We want to reverse the fiscal dogma of the last decades, which has unravelled everything. This is not only a question of social justice, but also a question of tax competition. I know that the States are afraid of the departure of large fortunes, but we must put an end to this race to the bottom in terms of taxation, because it is a democratic issue. This lack of taxation gives the impression of a split in the population, that the rich are evading the society in which they live. There must be a recognition of fiscal sovereignty.
What do you expect from this initiative?
We know that this is a complicated issue, because taxation is linked to social models and we do not all have the same traditions. To bring everyone together, we want to start with this appeal, to send a political signal and say ‘stop’. Our appeal is broad and transparent. We also have millionaires with us. We would like to ask the institutions to start this work.
We hope politically that this will create a wider membership than already exists. We want to bring this issue into the public debate, to put this proposal on the table. It’s important to discuss this topic again and to have a new type of financing after the last crises. We need to accelerate politically on this issue, to put it back on the political agenda in an urgent and serious way.
How did you bring the signatories together?
Together with my colleague Pedro Marques (S&D, Portuguese), we wanted to call on more than just our group. We spoke with various MEPs to understand the situation in their countries.
We have been talking to experts for a long time, including Gabriel Zucman, who co-authored the op-ed. We also offered to join the millionaires, following their call for higher taxes on the sidelines of the Davos Economic Forum. This is extremely important, because it shows that it is not a question of ‘rich versus poor’. It was an enriching meeting, because they are progressive and a force for proposals and enthusiasm. They are willing to move forward on this issue. We hope that this is just the beginning.
In your op-ed, you propose a threshold of 1.5% of effective taxation from a wealth of 50 million euros. How did you arrive at this rate?
Indeed, the question of the rate and threshold is difficult to determine. We made this choice in consultation with experts, reading the work of economists Lucas Chancel, who is one of the signatories, and Gabriel Zucman. We have drawn on the debates between experts.
We expected this to be a debate, but in the end this wasn’t the case. The rate and threshold are revisable, in fact. Our aim is to put a proposal on the table and see how it reacts, whether or not there’s a buzz, some kind of significant buy-in.
We are open about the modalities, as this will undoubtedly be the subject of negotiations. Some will want a threshold of 20 or 30 million euros. We want to show our willingness, on the European side, to have a strong proposal, because things are moving in the United States, particularly with regard to President Biden’s State of the Union address.
However, we have not yet put a figure on how much this could bring in at EU level.
You mention the idea of an exit tax within the EU. How would it work?
It’s time for the EU to defend its interests more aggressively, like the US with the Inflation Reduction Act (see EUROPE 13138/1). Europeans are afraid of a flight of big money, but we should be able to set up this kind of system.
You mention the fact that the richest 1% emit more CO2 than the poorest half of the planet. Would this tax have an environmental component?
This raises the issue of the consequences for economic efficiency, social and democratic justice. But the ecological issue is not mentioned enough. As we know, it is the richest who pollute the most, while the poorest pollute the least, but suffer the most from pollution.
At some point, we have to think about the fact that we need resources to finance the ecological transition.
For more information: https://aeur.eu/f/5sf