The United States economy demonstrated unexpected strength in the second quarter of 2024, growing at an annual rate of 2.8%, up from 1.4% in the first quarter. This growth, attributed to increased consumer spending and business investment, has bolstered the Biden administration’s economic narrative ahead of the upcoming presidential elections.Treasury Secretary Janet Yellen, speaking at the G20 Finance Ministers meeting in Rio de Janeiro, praised President Biden’s economic leadership, citing the creation of 15.7 million jobs since he took office. Yellen emphasized that the strong US growth was not accidental but a result of the administration’s economic plan, which she believes is helping to keep the global economy resilient.However, on the international stage, the US position diverged from some of its G20 counterparts. Yellen rejected the need for a global agreement on taxing the super-rich, a proposal championed by Brazil’s G20 presidency. While expressing support for progressive taxation within individual countries, Yellen stated that coordinating global fiscal policy is ‘very difficult’ and unnecessary.The Brazilian proposal suggested a 2% tax on individual fortunes exceeding $1 billion, potentially generating up to $250 billion annually from approximately 3,000 billionaires worldwide. Despite support from countries like France, Spain, and South Africa, the US and Germany expressed reservations.Yellen emphasized that while the US supports progressive taxation and ensuring high-income individuals pay their fair share, each country should independently ensure its tax system is fair and progressive. She referenced President Biden’s proposed ‘billionaire tax’ as an example of the US commitment to this principle.As the G20 meeting continues, discussions are expected to focus on climate change financing and debt, with a joint statement likely to support the concept of progressive taxation without explicitly endorsing the ‘billionaire tax’ proposal.
Key points
- US economy grew by 2.
- Treasury Secretary Yellen praised Biden’s economic policies but rejected a global agreement on taxing the super-rich at the G20.
- The US supports progressive taxation domestically but sees difficulties in coordinating international tax policies.
8% in Q2 2024, surpassing expectations.
Contradictions👾While Yellen praised Biden’s economic policies and their global impact, she simultaneously rejected a global approach to taxing the super-rich, suggesting a preference for national solutions over international coordination on this issue.
