By James A. Paul and Katarina WahlbergPublished by Global Policy Forum, WEED
and the Heinrich Böll Foundation
Table of Contents
- Major Proposals
- Carbon Tax
- Currency Transaction Tax
- Other Proposals
- Common Issues and ThemesOrganization and Oversight
- Policy Aspects
- Strategic Issues
- Web Resources
This paper has been prepared in conjunction with a roundtable on "Global Taxes for Global Priorities" held in New York on May 5, 2001 by Global Policy Forum, WEED, and the Heinrich Böll Foundation.
Many crises threaten a globalizing world, including international financial instability, growing worldwide poverty, global warming, and epidemic diseases that know no boundaries. Solutions require intense international cooperation and stronger global institutions. Progress will especially demand large new financial resources tens of billions of dollars to finance global public health, take steps towards environmental sustainability, and build programs to insure education and livelihoods for all.
Unprecedented wealth and productive capacity are available today, more than ever before in human history.Since 1950, gross world product has multiplied seven times and product per capita nearly three times, both in real terms. Yet the global economy organizes a vastly unequal division of the world's resources, promoting private consumption and accumulation over public well-being. Development aid funds have declined, urgent global projects have stalled for lack of money and worthy international organizations like the UN have fallen prey to budget caps and assessment shortfalls.
Bold and innovative steps are urgently needed to tap the world's wealth. Global taxes offer the most promising approach. International projects and organizations cannot depend solely on contributions from nation states, much less rely on private charity or business "partnerships." They must develop independent revenue sources to fund public purposes at the global level.
Taxes amounting to just 1% of world GDP would raise over $400 billion per year. Such a sum would meet many urgent needs while placing a very modest burden on the world's richest consumers.
Advocates have offered dozens of proposals for global taxes, but two have gained special attention: a tax on the carbon content of commercial fuels (often called a Carbon Tax), as a means to stop global warming, and a currency transaction tax (often referred to as a Tobin Tax), to reduce speculation and global economic instability.
Some day, an international political authority will levy global taxes, but at present a robust authority of this kind, with sufficient accountability and enforcement powers, does not exist. So initially, national governments must levy such taxes as part of an international tax agreement. Part of the funds levied will go towards global purposes, while part will be kept in the national treasury. Transition towards truly global taxation will await strengthened and democratized global institutions, sometime in the future, but today we must make a start along the road.
Global taxes are not a new idea. Legal scholar James Lorimer referred to the idea in his 1884 book Ultimate Problems of International Jurisprudence. Many of the most famous economists of the earlier twentieth century likewise considered it, including Alfred Marshall, John Maynard Keynes, and James Meade. Around the time of the United Nations’ founding in 1945, economists and policy makers often spoke of the need for robust international economic policy to avoid the dangers of renewed depression and war. To them, global economic management and even global wealth redistribution seemed not only desirable but a logical necessity.