Calls for higher taxes on the super-rich are becoming louder and even conservative governments are joining in.

In Rome, ministers in Giorgia Meloni’s right-wing government have doubled the so-called flat tax on foreign income, introduced by a previous government to attract wealthy investors, from 100,000 to 200,000 euros (about 85,500 to 171,000 pounds).

Italy’s low tax rates on foreigners and their income earned abroad had an impact, with 1,186 wealthy individuals making the country their tax residence, but protests this year showed that the tax was out of step with the prevailing mood.

Italian Economy Minister Giancarlo Giorgetti said Italy was now against the idea of ​​countries competing with each other for “tax breaks” for the wealthy.

The decision came just weeks after 19 former heads of state – including former Australian Prime Minister Julia Gillard and Dominique de Villepin, who held the same role during Jacques Chirac’s presidency – signed a joint letter calling for higher taxes on wealth, and G20 finance ministers agreed at a meeting that more must be done to tax the global elite.

While Giorgetti did not mention the UK, another reason for the U-turn was Rishi Sunak’s partial removal of tax breaks for wealthy foreigners, known as non-domicile status. Italy’s preferential treatment became an embarrassment for Meloni, all the more so as Keir Starmer promised that a new Labour government, if elected, would take an even tougher stance on non-domicile citizens.

Joe Biden’s rhetoric has also helped the cause of a global wealth tax. The US president made the attack on the super-rich a central theme of his re-election campaign before making way for Kamala Harris as the Democratic Party’s candidate.

“I don’t think I’ve ever seen such a big shift in the wealth tax debate as I have in the last three years,” says Rebecca Gowland, executive director of Patriotic Millionaires UK, a pressure group campaigning to end extreme wealth.

“And what happened at the G20 summit is incredibly exciting. There is no concrete strategy yet, but many countries agree that the issue must be taken seriously and that is a huge step forward,” she added.

The G20, formed after the 2008 crisis to coordinate efforts to rebuild the battered global economy, has members from all over the world, from Saudi Arabia, Mexico, Turkey and Indonesia to the United States, China, France and the United Kingdom.

The current host is Brazil, and the country’s president, Luiz Inácio Lula da Silva, is credited with putting the wealth tax at the top of the group’s agenda.

Da Silva invited French economist Gabriel Zucman to advise the G20 on how to tax the super-rich in a way that all countries could agree to.

Zucman’s report – Minimum standard for the effective taxation of ultra-high-net-worth individuals – said that billionaires currently pay an average of 0.3% in taxes on their wealth. The effective tax rate is the amount that results after taking into account all loopholes and legitimate tax avoidance measures by the rich.

Zucman said the average wealth of the top 0.0001 percent of the population grew by an average of 7.1 percent annually between 1987 and 2024, increasing billionaires’ share of global wealth from three percent to 14 percent.

Zucman described his plan as raising the income tax so that billionaires would have to pay taxes of at least 2 percent of their wealth each year. He said progressive taxation is a pillar of democracy.

A minimum tax of 2% of wealth on global billionaires would raise $200-250 billion (£150-200 billion) in tax revenue annually from around 3,000 taxpayers worldwide. Extending the tax to centimillionaires, those with wealth of $100 million or more, would raise a further $100-140 billion, Zucman’s report said.

Norway has had a wealth tax for many years. Since Norway is one of the richest countries in the world in terms of a person’s wealth, this tax has often been the subject of debate. In 2023, a year after the left-leaning government in Oslo raised the tax rate from 0.85% to 1.1%, local newspapers reported an exodus of the super-rich, some of them to Switzerland.

Spain reinstated a wealth tax at the same time that Norway raised its own, leading to the same headlines about a caravan of millionaires leaving for more hospitable countries. The Spanish wealth tax applies to assets over €3 million and can be as high as 3.5 percent, depending on the individual’s wealth.

Many Swiss citizens argue that their wealthy citizens have been operating at the expense of others for too long. Environmental activists argue that the country is already suffering the worst effects of the climate crisis and that the government, known for its low taxes, needs to put more money into reducing CO2 emissions.

Following the influx of Norwegian billionaires and a heated debate over who should pay more taxes to fund climate-friendly initiatives, the youth wing of the Swiss Social Democrats (Juso) proposed a 50% inheritance tax on inheritances worth over 50 million Swiss francs (45 million pounds), with the money earmarked for the ecological restructuring of the economy.

The Juso collected 130,000 signatures in support of its petition “Initiative for a Future”, thereby exceeding the threshold of 100,000 signatures set by the Swiss Parliament for a nationwide referendum.

The Swiss government responded by announcing that it would oppose the tax in a referendum in the next two years. But with ice melting in the Swiss Alps, politicians are under pressure to say where they will get the money to fight the climate crisis – if not from the super-rich.

Oxfam, the organization that produces an annual global tax report, said it supported the G20 initiative but wanted it to go beyond simply targeting billionaires such as former Microsoft boss Bill Gates, Bernard Arnault, the head of luxury brand LVMH, Amazon’s Jeff Bezos and the German billionaires behind supermarket chains Lidl and Aldi, the Schwarz and Albrecht families.

Many governments fear driving wealthy investors to countries outside the G20. Singapore and the United Arab Emirates have financial centres and low tax systems that have encouraged many wealthy people to relocate in recent years.

Christian Hallum, tax adviser at Oxfam, said the G20 must counter the threat of an exodus. “Everyone in the top 1% has done very well for decades and pays a lower effective tax rate than most households,” he said.

Oxfam is calling for the inclusion of hundred-millionaires and is demanding that the additional tax revenues be used specifically for poverty reduction measures.

“We are all incredibly excited about what happened at the G20 finance ministers meeting and the intention to tax the super-rich. But while 2% is better than nothing, it is at the lower end of our ambitions. Enormous efforts are needed to tackle global poverty and we need to cast the net wider,” he said.