Brazil and Mexico have the most billionaires in Latin America, but earn the least from estate taxes, according to a new study from a regional economic group.
Brazil tops the billionaires list with 30, followed by Mexico, with 11, said last month’s report from the Economic Commission for Latin America and the Caribbean.
Mexico’s Carlos Slim is the richest in the world according to the annual Forbes magazine ranking.
Yet between 2005 and 2007, Mexico earned just 0.18 percent of its GDP from estate taxes, and Brazil only 0.44 percent, according to the report on economic elites, inequality and taxation.
That put them behind several other Latin American countries with far fewer billionaires, such as Colombia, which has three billionaires and earned 0.54 percent from estate taxes.
And income disparities are vast.
More than 2 billion people live on less than US$2 a day worldwide, “revealing the extreme disparities in the global economy,” study authors Andres Solimano and Juan Pablo Jimenez wrote.
The sharp concentration of income and wealth in the hands of a few “reduces the legitimacy of capitalism,” they said.
The wide gap between the haves and the have-nots also undermines democracy, the authors added, because “winning an election requires financing, giving an advantage to those who have resources.”
Earlier this year, the UN called for a “billionaires tax” of 1 percent that could raise more than US$40 billion a year, as part of a package of global taxes that could help raise hundreds of billions of dollars for development.