Global momentum is growing to make tax rules fairer and more effective so those who have more pay more.

There’s no shortage of wealth, but it’s concentrated in few hands, with elite fortunes climbing to unprecedented levels. In 2024, the world’s 2,769 billionaires added another US$2 trillion to their wealth, equivalent to around US$5.7 billion a day. The world’s richest one per cent added a staggering US$42 trillion to their existing fortunes over the last decade.

Meanwhile the vast majority of people are struggling. In recent decades, thanks in part to civil society’s efforts, advances were made in cutting the number of people living in extreme poverty. But progress stalled during the COVID-19 pandemic and hasn’t picked up since.

Today, as the cost of living soars, many face a daily struggle to make ends meet. Food and fuel prices are being driven up by conflicts and the impacts of extreme weather events made more likely and frequent by climate change. In a more volatile world where powerful states are becoming less inclined to resolve disputes peacefully, and where extreme weather events are surging due to climate inaction, high everyday costs could become the new normal, making this an age of economic precarity.

An unequal world

It’s also an era of economic inequality that threatens to become entrenched from one generation to the next. The unimaginable wealth of elites contrasts starkly with the prospects of many young people, who leave universities with knowledge and skills but few opportunities. Growing AI applications could further reduce employment prospects. In many countries there’s an acute  affordable housing shortage, forcing people to hand over increasing proportions of their incomes in rent. In these conditions, it’s much harder for people to rise above the economic circumstances they grew up in. Meanwhile, elite riches are passed down: 36 per cent of billionaire wealth now comes from inheritance.

The super-rich aren’t just sitting back and counting their money. In many countries, they’re using their wealth to intervene in and distort politics, raising fears of state capture. Ultra-wealthy elites have always used their influence to shape economic policies to their advantage, and oligarchic power has long been a feature of less democratic states. But Trump threatens to take this to a new level. His cabinet is awash with billionaires who are playing an active role in pushing through deeply regressive policies, raising concerns that the USA is becoming an oligarchy. Wherever this happens, it undermines democracy and human rights. When it happens in the USA, it has global implications.

At the same time, some of the corporations reaping the biggest profits are the ones causing the worst harm. Over the past five decades, oil and gas companies have made profits averaging US$2.8 billion a day while being responsible for the bulk of the greenhouse gases causing climate chaos. They’ve banked record profits since Russia launched its full-scale war on Ukraine. Far from using their soaring revenues to invest adequately in renewable energies, they’re scaling back green investments and planning still further extractive projects – all while using their wealth to lobby against measures to rein them in.

Yet, the credible plans that exist to tackle major global challenges – such as the 17 Sustainable Development Goals, the Paris Agreement on climate change and a Global Biodiversity Framework that aims to reverse environmental degradation – aren’t being implemented because the money isn’t forthcoming to fund them properly.

It’s no wonder that civil society is increasingly focusing on tax justice, putting forward plans to end tax avoidance and proposals such as wealth taxes to unlock funding to meet societal needs and level a vastly uneven playing field.

The tax problem

Even under current tax policies, stunning amounts of money are lost to tax avoidance each year. The Tax Justice Network estimates that US$492 billion is lost through the use of tax havens, US$347.6 billion by multinational corporations and US$144.8 billion by wealthy individuals. This is money that should be going into public coffers to pay for vital services such as education, healthcare and social welfare and to tackle climate change. Global south countries suffer the most, losing five times more of their public health budgets than those in the global north.

Alongside advocacy to close global tax loopholes, momentum is building for additional forms of taxation to address the problem of elite wealth. It’s estimated that wealth taxes alone could raise over US$2.1 trillion a year – easily enough to fund the estimated US$1.3 trillion a year needed to finance a global transition to low-carbon economies and adapt to climate change, with plenty left over for the US$30 billion required to implement the Global Biodiversity Framework. Inheritance taxes could also help play a role in addressing the intergenerational perpetuation of elite economic power and inequalities.

Ideas like these are popular, with opinion polls in both global north and global south countries showing widespread support for the idea of making rich people pay more tax. The benefits in terms of public welfare are clear. As well as improving public services, fairer tax could lessen the political impacts of economic inequality and insecurity. In many democratic countries, economic anger is driving a rejection of established politics and an embrace of political novelty, often exploited by opportunistic right-wing populist and nationalist politicians who spread division and hatred.

Discontent is also being expressed in street protests whenever economic pressure grows, typically as a result of inflation, the withdrawal of subsidies or the introduction of taxes that don’t target the wealthy but instead fall disproportionately on those who have little. Last year saw a wave of protest across several African countries, led by first-time protesters from Generation Z. It started in Kenya, triggered by a plan to introduce sweeping tax increases. Similar protests followed in Ghana, Nigeria and Uganda, all of which have young populations facing lives of economic hardship and limited opportunities. There have been many other such protests around the world, and more are sure to come.

The problem standing in the way of change is, of course, the immense lobbying power of giant corporations and the super-rich. There are some honourable exceptions, such as the Patriotic Millionaires, a group of wealthy people in the USA calling for higher taxes to help address economic inequality, with a similar group in the UK. But in the main, great wealth and the access it buys are being used to avoid taxes and argue against new tax policies. That’s why, instead of making those who have the most pay more, governments often prefer to introduce and increase indirect taxes such as sales and value-added taxes. These are taxes everyone has to pay and they’re regressive, meaning they take a larger percentage of income from poorer than richer people.

In recent decades, taxes on the very wealthy have fallen. States have been pushed into a race to the bottom, offering lower direct personal and corporate taxes in the hope of attracting business, or persuaded by the political ideology that tax breaks for the rich somehow create wealth that trickles down for everyone – an idea that has been repeatedly disproved.

Global moves

If a challenge isn’t being addressed at the national level, it makes sense to take it to the global level. This is particularly the case with tax avoidance, much of which is enabled by the movement of money across borders. There’s a clear regulatory gap.

But many of the most powerful economies don’t want to do anything about it. De facto control of the global tax regime has long been in the hands of the Organisation for Economic Co-operation and Development (OECD), a club of 38 wealthy economies. Everyone has to abide by what it decides, and the OECD has consistently been accused of setting rules that favour wealthy countries and not doing enough to tackle low corporate tax and tax avoidance. Wealthy states are effectively stopping all other countries from raising enough revenue to pay for adequate public services, a clearly unjust stance that smacks of neocolonialism.

There’s some hope of progress. In December 2022, in the face of opposition by several global north states and heavy OECD lobbying, states at the United Nations (UN) General Assembly passed a resolution to start intergovernmental talks on a global tax convention. The proposal came from the African Group of states, led by Nigeria, and was a long time coming. The African Group first called for the development of a tax body at the UN in 2019, and global south states and civil society have been pushing for the UN to play a role for at least two decades.

The resolution set 2027 as the deadline for finalising a tax convention. In December 2023, the UN established an intergovernmental committee, which met three times in 2024, adopting its terms of reference through a vote in August. Here, the dividing lines were laid bare. The vote had the support of all but eight wealthy states: Australia, Canada, Israel, Japan, New Zealand, South Korea, the UK and the USA. These eight countries all lose significant revenue due to offshore tax avoidance and, along with their dependencies – such as the UK’s network of tax havens in its overseas territories – are responsible for 43 per cent of global revenue losses caused by tax avoidance. They’re also home to many powerful companies and wealthy people with a lot of influence. European Union (EU) states all of which abstained in the vote, are also standing in the way of progress.

The committee was mandated to hold at least three sessions a year to negotiate the treaty. The most recent meeting in February focused on another key procedural issue: how to make decisions when there’s no consensus. The African Group called for decisions to be made by a simple majority vote, while others, including the EU, wanted consensus to be required, which would have handed them a veto. The compromise reached could present an obstacle to progress: what are defined as substantive issues will need a two-thirds majority, while procedural issues will require a simple majority. But if global south states stick together, they should have the numbers.

There’s another growing challenge in the withdrawal from multilateralism and assertion of narrow transactional politics being spearheaded by the Trump administration. Since Trump returned to power, the US government has said it won’t cooperate with the UN Human Rights Council and given notice of its withdrawal from the Paris Agreement and the World Health Organization. The US delegation walked out of tax treaty negotiations at the February meeting and urged other countries to join them. So far none have followed suit.

Time to push for change

More hope for change came from an unlikely source last year. The G20 club of the world’s major economies is rarely an arena civil society looks to for progressive moves, but even it can see the problem: at the 2024 summit in Brazil, leaders agreed on the need to tax the super-rich. Now they must be pressured to turn those words into action to end tax avoidance and make the rich pay more.

On its own, the proposed UN tax convention won’t solve the problem. But it could be a crucial positive step, not least because it would create a decision-making system on tax matters that would be fairer for all countries, including the many in the global south long been denied a say. Civil society should work with supportive global south states to push for the agreement of an ambitious treaty by the 2027 deadline.

The global economic system has reached unsustainable levels of inequality. As billionaire wealth soars while public services dwindle, tax justice represents both a sound policy choice and a moral imperative. In a world facing multiple intersecting crises, tax justice stands as a cornerstone for building the more equitable future humanity deserves.

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