Global tax on billionaires? Janet Yellen says 'no'

According to supporters, global taxation would prevent the rich from moving their wealth to countries where they can avoid paying taxes. This would allow countries to raise more tax revenue to finance other priorities and to use taxation to reduce income inequality, which has increased dramatically in recent decades.

"This is exactly what we have done with minimum corporate taxation," French Finance Minister Bruno Le Maire said last month. "It would be the same for the international taxation of the richest individuals."

Most countries levy income taxes based on residency. But the United States, oddly enough, taxes its citizens on their worldwide income, making it already more difficult for Americans to escape taxation by moving assets and earnings abroad.

The Biden administration has proposed significantly raising taxes on high-income Americans, but has avoided introducing an estate tax, which seeks to annually collect a share of an individual's net worth. Instead, President Biden has pushed for a plan that would require Americans with assets over $100 million to pay a 25% tax annually on all their earnings, including unrealised capital gains.

In the US, capital gains are generally taxed at a maximum rate of 23.8% when the asset is sold, which means that gains may remain untaxed for years. Income, including wages, is taxed at the time of accrual at a rate of up to 37%, in addition to other levies. The Supreme Court is expected to rule soon on a case that could create a constitutional ban on taxing wealth.

Yellen helped spearhead the global corporate tax agreement, which sets a 15% minimum that companies must pay in the jurisdictions in which they operate. Congress, however, did not approve the deal due to opposition from Republicans.