An interesting tax that I came across on the BBC World Service radio. Hassan Heikal is Chief Executive Officer, EFG Hermes the largest investment bank in the Arab world and his tweet from Tahir Square was in the FT Opinion page. He states that the austerity measures proposed will just make matters worse and will lead to severe social unrest in Europe. We need to tax the higher incomes more in order to be able to pay off the debt. Here is part of his piece from the FT. You can read the full tweet by clicking below:
Hassan Heikal – tweet from Tahir Square
Cuts in governments’ budgets will lead to higher unemployment which is already a staggering 22 per cent in Spain, where one in every three young people is unemployed. Do you think your average 25-year-old Spaniard will stay at home watching Barcelona versus Real Madrid? Or will he ultimately take part in social unrest or, as I call it, a “social justice movement”?
So what could be done differently? I have a controversial solution. We should impose a one-off global wealth tax of ten to 20 per cent on individuals with a net worth in excess of $10m, with tax receipts going to their country of citizenship.
The aggregate wealth of those individuals – that is those with net worth in excess of $10m – is approximately $50,000bn. Paradoxically they – or I should say “we” – represent fewer than one in 10,000 of the world’s population.
The global proceeds of what I call the “Tahrir Square tax” would be, if levied at 10 per cent, approximately $5,000bn. Europe should receive $1,500bn, more than enough to deal with the European public debt crisis. It would bring down eurozone public debt, excluding that of Germany and France, to below 50 per cent of gross domestic product.