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from
The Aquarian, Fall 2006
Robin Hood Taxes
New
strategies to help level the globalized playing field
By SYD BAUMEL Imagine
if every time you bought a plane ticket, along with all those nuisance
taxes that practically double the final sticker price, one more tiny levy
was collected by the federal government.
Instead
of being earmarked for tarmac repair or more frequent strip searches, this
levy's revenues would be dedicated to an international fund to buy medicines
for the world's poorest victims of HIV/AIDS, tuberculosis, malaria and
other pandemics.
If
you live in France, you don't have to imagine. Starting on July 1, 2006
airplane ticket buyers in that country began paying a modest levy of 1
to 4 euros (about $1.50 to $6 Cdn) on domestic and international economy
class flights and a heftier levy of 10 to 40 euros on business and first-class
flights.
The
French government expects its "air ticket levy" to raise over 200 million
euros a year for lifesaving drugs in the developing world. Thirteen other
countries, including Brazil, Chile, Ivory Coast, Jordan, Norway and the
UK, have also agreed to implement the philanthropic levies, and the push
is on to get others onboard, including Canada and the United States. If
every country participated, the levy could bring in a whopping $10 billion
a year, according to French President Jacques Chirac.
Behind
the air-ticket levy is a determined campaign by France's Chirac, Brazil's
Lula da Silva and dozens of other heads of state to address a nagging global
problem: Economic globalization, touted by its proponents as the trickle-down
equalizer of the world's haves and have-nots, has actually widened the
gap between extreme wealth and extreme poverty.
As
Chirac pointed out in Paris this spring at a major
international conference on these "new development financing mechanisms":
The
traditional solution to such inequities has been foreign aid, or "offical
development assistance" (ODA), as it's technically known. ODA is the money
developed nations contribute to developing nations. The amount is modest,
given the stakes: a mere 0.22 percent of gross national product from the
United States and 0.34 percent from Canada last year. The most generous
contributors Sweden, Norway, Luxembourg are giving a lot (nearly 1
percent). Unfortunately, that's a lot of a little; their GNPs are small.
It's
ironic, given Canada's miserly contribution, that our own Lester Pearson
chaired an international commission in 1969 that first proposed an ODA
of at least 0.7 percent of GNP. The UN General Assembly jumped at the idea
and promptly, in 1970, passed a resolution that all donor nations would
reach 0.7 by the middle of the decade. But by 2000, when the world made
yet another magnanimous pledge this time to slash world poverty and dramatically
increase access to basic education, heathcare and other essentials by 2015
(the so-called Millennium
Development Goals) most of the 22 ODA donor nations were still far
short of the 0.7 goal. Today, about half still are. And significantly,
the biggest potential contributors the U.S. and Japan are among the
most recalcitrant, having failed to commit to a timetable to reach 0.7
by 2015.
According
to the Millennium
Project (headed by famed anti-poverty economist Jeffrey Sachs), if
the ODA donor nations were to achieve an average of just 0.44 percent this
year and 0.54 percent by 2015, it would be enough to meet the Millennium
Development Goals. Last year the donor nations averaged 0.33; but with
the Bush administration maxing out its credit cards spreading freedom in
the Mideast, it's prudent for Chirac et al. to be talking taxes. "The United
Nations estimates that official development assistance has to be increased
to nearly $200 billion a year by 2015, versus today's $65 billion, if we
want to achieve the Millennium Development Goals," according
to Chirac. And that, according
to Germany's development minister Heidemarie Wieczorek-Zeul, means
"we have no option but to introduce innovative financing instruments."
The
air-ticket levy is just a start. More Robin Hood taxes could be on the
way. Leading contenders are:
If
the bill for putting a serious dent in world poverty seems enormous $200
billion the tax base is ginormous: $40 trillion ($40 thousand
billion) in global GNP. A mere penny on the dollar would raise $400 billion
a year.
But
that's not all.
For
decades, development activists have had their eye on the money that changes
hands every day in the foreign exchange, or "forex," market. You think
the world's GNP is ginormous? Global forex does nearly $2 trillion a
day.
Most
of that trading is just high-stakes gambling deep-pocketted speculators
hoping to get even richer from the ups and downs of foreign currencies.
Their machinations have hobbled more than one vulnerable economy.
Over
30 years ago, an economist named James Tobin proposed a very small tax
half of one percent or less on foreign exchange currency transactions
to discourage this destructive speculation. The proceeds would go to humanitarian
causes, such as fighting poverty. Tobin went on to win the Nobel prize
for economics, and his tax became a cherished cause of development activists.
Fast
forward to 2006. While most countries continue to balk at imposing the
Tobin
tax (an exception: Canada's parliament endorsed it in 1999), the Robin
Hood tax crowd is pushing a more palatable Tobin tax lite less than one
hundredth of one percent: its purpose to raise development money only.
Larry
Elliott, economics editor of The Guardian, thinks Tobin lite
has legs. "Estimates made by the Stamp Out Poverty campaign group suggest
that a 0.005% tax on the world's most traded currencies could generate
between $35 billion and $40 billion a year without really making a dent
in banking sector profits," he
wrote this February.
To
put this in perspective, imagine if you wanted to buy $5,000 in American
currency for a shopping spree in Minneapolis. At current rates, that might
cost you $5750 Cdn. How much would you be taxed to help raise billions
for people who earn less than a dollar or two a day?
Twenty-nine cents. A drop in the bucket. But add it all up worldwide and it would equal the ODA of the USA and Japan combined. Skeptics have argued that a Tobin tax would be unenforceable. Not any more, according to Elliot: In the post 9/11 world, a tax on forex dealings would be virtually impossible to evade. Such is the paranoia about terrorist financing that the authorities now use the most sophisticated electronic technology to keep tabs on flows of money. Unfortunately, the U.S. and the UK still aren't buying it. Hopefully they'll be more amenable to some of the other taxes on the table. Let's look at a couple. Proponents of the environment and weapon sales taxes have their eye on the world's 50 "least developed countries." These are places like the Democratic Republic of Congo where vast mineral resources are extracted by foreign corporations in return for contributions to greedy local leaders at great cost to the environment. An environment tax on the profiteers and polluters would reclaim some of that loot and plow it back into the environment. The pattern continues for weaponry. Wealthy countries like Canada, the United States, France and Japan sell most of the armaments upon which the impoverished, war-torn countries of sub-Saharan Africa lavish a higher percentage of their gross national product than any other country, the United States included. According to development activists, a modest tax on weapon sales of just one percent could raise hundreds of millions of dollars a year. The UN could then use that money to help repair the damage of war and perhaps even deter some of the fighting. Taxes rank right up there in popularity with death and terminal illness. But a pinch of Robin Hood taxes would be strong medicine for the others. That sounds like one of the better bargains in the world today. Aquarian
co-editor Syd Baumel
serves on the national council of the World
Federalist MovementCanada
and is the creator and publisher of eatkind.net.
All
contents copyright © 2006 The Aquarian.
|
If the bill
for putting a serious dent in world poverty seems enormous $200 billion
the tax base is ginormous: $40 trillion ($40 thousand billion)
in global GNP.
For
decades, development activists have had their eye on the money that changes
hands every day in the foreign exchange, or "forex," market. You think
the world's GNP is ginormous? Global forex does nearly $2 trillion a
day.
According to development activists, a modest tax on weapon sales of just one percent could raise hundreds of millions of dollars a year. The UN could then use that money to help repair the damage of war and perhaps even deter some of the fighting. |