Fiscal Justice – An easy step to a better future

April 2, 2009

It’s better than a “stimulus.”

The success of the G20 summit can be assessed very simply. Unless the gathered leaders agree amongst themselves to harmonize tax rates upwards for the world’s richest people – the vast majority of whom live in G20 countries – then it is an abject, disgusting failure. The needs of the aged, sick, disabled, the out of work and the challenge of building a sustainable economy can only be funded through taking money from those who have too much, and have profited so handsomely from the now bursting boom, and spending it on projects which benefit those who remain poor.

Of course, no such proposal was ever on the table for the G20. Matters for discussion involved the degree of “stimulus” to be adopted by various nations. European Union nations resisted calls for higher packages due to budgetary constraints imposed upon them through mutual consent in order to construct the Eurozone. America and the United Kingdom resisted calls from nations across the world for tight regulation of financial markets and the closing of repulsive “tax havens” which allow for the looting of economies rich and poor.

China expressed a desire for a global reserve currency, while developing nations in general sought reform of multi-national institutions like the IMF to ensure greater representation. Those excluded entirely from the summit – 80 percent of the world’s nations – simply hoped for some support as their economies implode due to the financial crisis induced by incompetence and greed in the richer nations.

Yet the notion of calling for a global taxation rate for the wealthiest is taboo. Governments, which represent not their citizens, but their elites, and who are interested more in restarting global growth than justice for the poor, all have a vested interest in keeping redistributive policies off the agenda. But absent a global agreement, the resources needed to address crippling social, economic and environmental problems, will not materialize.

Instead of fiscal stimulus, we need to call for fiscal justice, and few are doing so. There is no better reason to call for the resist the G20, wherever it roams.

And this is obviously a populist message. In most countries taxation of the highest earners and corporations could be doubled, and still leave the wealthy, well, wealthy. Sweden and the UK – not dissimilar in personal wealth, have massively different tax regimes. Which one has the better services?

Raising taxes on the rich leaves room for falling taxes on the poor, while improving services at the same time.

For many years such calls were met with the standard line about higher taxes deterring innovation and enterprise, or leading to capital flight. But with the world’s banks either struggling or passing into forms of public ownership, capital flight has never been easier to regulate.

And it is extremely debatable as to whether innovation is best stimulated through massive financial rewards given the record of the likes of RBS.

It’s all hokum. We need to propose, to demand, a rational, fair fiscal world. We need it now.


One Response to “Fiscal Justice – An easy step to a better future”

  1. […] to harmonize tax rates upwards for the world’s richest people (elsewhere) […]

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