Hassan Heikal, chief executive of EFG Hermes, published an article in the Financial Times on Tuesday calling for a global tax on the rich to save capitalism.
He proposes a one-off global wealth tax of 10 to 20 per cent for individuals with a net worth in excess of $10m, with tax receipts going to their country of citizenship.
The proposed tax, which Heikal calls the “Tahrir Square tax,” would generate some $5,000 billion if fixed at 10 per cent of the wealth of the world’s richest people, which is around $50,000 billion.
The businessman says the world’s wealthiest people pay on average a lower rate of personal income tax than most middle-income earners.
Heikal poses the question that may occur to many people – why would the rich not lobby against this tax? His answer is that if uncertainty in the markets clears, equity and asset valuations will rise significantly – in his view, by more than the one-off cost of a global wealth tax, making the rich even richer.
The proposed solution to calm popular anger worldwide seems for Heikal the last chance to save the capitalist system.