New push for global taxes: A renewed drive for global taxation threatens to accomplish the UN's goal of an international revenue service that would collect taxes from every person on the planet. (Cover Story: United Nations).
The granddaddy of all global tax proposals, the currency transaction tax (CTT) or "Tobin tax," was first proposed by Yale economist James Tobin in the 1970s. Tobin suggested using an international levy on currency "speculation" to "throw some sand in the wheels of our excessively efficient international markets." Extreme instabilities in currency exchange rates, resulting in frequent "currency crises," were brought about in the first place by the worldwide abandonment of precious metal standards. The Tobin tax, therefore, is a remedy being offered by the same folks who created the problem in the first place. But it's fashionable to blame currency traders and other private sources of international capital, rather than irresponsible inflationary policies, for the havoc wrought by market forces that punish the purveyors of fiat currency.
The many currency crises of the 1990s gave the Tobin tax new political momentum. German economist and IMF advisor Paul-Bernd Spahn, heir-apparent to the recently deceased James Tobin, began promoting an updated, two-tiered version of the currency transaction tax. The Spahn version would be applied at a much higher rate during episodes of currency instability, thereby supposedly discouraging so-called speculative attacks.
1998 was a banner year for the Tobin tax, and is regarded by many of its proponents as the beginning of a successful worldwide campaign to bring the CTT to fruition. In that year, Global Policy Forum, an influential think tank headquartered on UN grounds in New York, initiated its Internet information program on the Tobin tax. As if on cue, two influential NGOs, the U.S.-based Tobin Tax Initiative and France's Association for Transaction Taxes to Aid Citizens (ATTAC), sprang up and started a carefully coordinated international campaign to promote the Tobin tax. On April 1st of that same year, AFL-CIO leader John Sweeney, in a speech to the Council on Foreign Relations, expressed support for the Tobin tax as a tool to "slow short-term speculation."
The new campaign bore almost immediate results. The Tobin Tax Initiative and ATTAC burgeoned in numbers (ATTAC now has tens of thousands of members worldwide, and is always a prominent participant in high-profile protests against globalization, such as the recent demonstrations in Barcelona, Spain). Other influential NGOs jumped on the Tobin tax bandwagon, including England's War On Want, Canada's Halifax Initiative, and Belgium's International Cooperation for Development and Solidarity (CIDSE). On March 23, 1999, the Canadian House of Commons passed a motion recommending that the government should "enact a tax on financial transactions in concert with the international community." On April 11, 2000, Representative Peter DeFazio (D-Ore.) and Senator Paul Wellstone (D-Minn.) introduced a resolution in the U.S. Congress recommending that "the United States should show leadership by enacting, in concert with the international community, transaction taxes on short-term, cross-border foreign exchange transactions to deter speculation. The adoption of such Tobin-style taxes should be done in coordination with a large number of nations ... with the revenue dedicated to urgent global needs; the United States should build support for and advocate this position at the World Bank and the IMF, as well as within other regional and international organizations, including the OECD, the G-8, and the newly-established G-20."
While there hasn't been much momentum for the Tobin tax in the United States since the DeFazio-Wellstone resolution, the issue continues to garner political support on the other side of the Atlantic. In August 2001, French Prime Minister Lionel Jospin announced that France supported the Tobin tax. The French National Assembly adopted, in November 2001, a law instituting a tax on international currency transactions, to go into effect as soon as similar measures are adopted throughout the European Union. Supporters of an international currency transaction tax designated March 13th of this year as "Tobin Tax Day." On that day, Belgium became the second country in Europe to sign into law a measure requiring a currency transaction tax. As with France, the law will take effect as soon as all the other members of the EU have passed similar laws. Also on March 13th, British MP Richard Allen introduced a Tobin tax proposal into the House of Commons. Meanwhile, a slick new ad promoting the Tobin tax is creating controv ersy in Great Britain. Featuring images of vultures tearing at the carcass of a woodchuck, the ad is narrated by actor Ewan McGregor (Obi Wan Kenobi in Star Wars: Episode I -- The Phantom Menace).
At the Monterrey conference on Financing for Development, currency transaction taxes were the topic of the hour. Tobin tax proposals figured prominently in the technical notes and early drafts of the Monterrey Consensus (the rambling 16-page agreement prepared in advance as the guiding document for the conference). UN Secretary-General Kofi Annan, who authored or personally approved much of the global tax material in these documents, actively supports such taxes. The final draft of the Monterrey Consensus, signed by the United States and many other nations on March 22nd at the conclusion of the summit, makes no explicit reference to the Tobin tax or any other form of global tax. But the language on page 10, paragraph 44, leaves no doubt that international taxation is still very much on the table: "We recognize the value of exploring innovative sources of finance provided that those sources do not unduly burden developing countries." The term "innovative sources of finance" (or of "revenue") is a very common euphemism for global taxation among insiders involved in the global taxation project. Technical Note No. 3, for example, one of the policy studies produced in preparation for the Monterrey Consensus, is an exhaustive summary of all of the major global tax proposals, including the Tobin tax, as well as detailed analysis of their political and economic feasibility; the study's subtitle is "Existing proposals for innovative sources of finance."
World Leaders for Global Taxation
Several world leaders at the Monterrey summit supported the Tobin tax, and global taxes in general, in speeches to the plenary session. Not unsurprisingly, Cuban dictator Fidel Castro voiced his support, stating that "measures like those suggested by the recently deceased James Tobin to slow down the uncontainable torrent of monetary speculation ... might be today the only ones capable of generating sufficient funds which, in the hands of organs of the United Nations ... could furnish direct assistance to development." French President Jacques Chirac also weighed in on the subject in his March 22nd speech to the plenary session: "[I]t is natural to consider drawing on the wealth created by globalization in order to finance efforts to humanize and control it. We therefore need to ponder more deeply the possibilities of international taxation."
Not to be overlooked, a boisterous coalition of NGOs, who met in a series of strategy sessions in the week preceding the summit, presented to the press and to the delegates a statement on behalf of the "NGO Global Forum." Among the many items demanded in the list is the stipulation that "currency transactions [sic] taxes must be collected as means of financing development and as a means of stabilizing the international financial system."
Currency transaction taxes aren't the only international levy under consideration. Another favorite is the carbon tax, a contemplated impost on carbon emissions. Carbon taxes do not yet enjoy a broad consensus of coordinated support among the NGO mobocrats and insiders. But efforts are already underway to organize a coalition of pressure groups, including sympathetic environmentalists. Harvard economist Richard N. Cooper argued, in the March/April 1998 issue of Foreign Affairs, for a "real global warming treaty" to eventually take the place of the watered-down Kyoto Protocol, in which a global tax on carbon would reduce greenhouse gas emissions while providing internationalists with a hefty stream of revenue into the bargain. Its potential to generate revenue is precisely what makes the carbon tax attractive to globalists. One UN paper estimated that a $21 per ton carbon tax could generate a staggering $125 billion annually for UN coffers.
Besides carbon taxes, other global tax proposals include taxes on e-commerce and even international e-mails, taxes on aviation fuel, taxes on the use of ocean shipping lanes, taxes on the use of the electromagnetic spectrum, fees to "rent" outer space for orbiting satellites, and taxes on envisioned future mining of the deep seabed. This last proposal, unfortunately, is already technically in effect, having been incorporated into the UN Law of the Sea Convention. It has yet to generate any revenue, however, because no deep seabed mining has yet taken place. Further down the road -- inevitably, if our leaders continue surrendering U.S. sovereignty to the UN -- will come global property taxes, poll taxes, and ultimately, a progressive global income tax collected by an International Tax Organization (known fondly in globalist circles as an ITO, although IRS --"International Revenue Service" -- might be more apt).
At the Monterrey conference, the U.S. delegation expressed strong opposition to global taxes in any form. U.S. Ambassador to the UN John Negroponte told THE NEW AMERICAN that "we certainly don't favor a currency transaction tax. Just as a general proposition, we are not advocates of any kind of global tax whatsoever. I think that what we're looking at more is opening up trade and commerce between countries, and looking at other ways of increasing growth. Taxation is not a word that immediately comes to mind when you think about economic growth." But the United States' willingness to participate in such an event in the first place, not to mention sign the Monterrey Consensus, a document that indirectly endorses global taxation, helps give credibility to the global tax cause. The U.S. also supports UN-coordinated transfer of wealth programs from "have" to "have not" nations, programs that contribute to the impetus for global taxation. By all appearances, the drive for global taxation is far advanced and will co me to fruition unless the U.S. gets out of the UN.
Pretexts Pave the Way
The campaign to create ideological consensus has already been enormously successful, judging from the near-unanimity on the subject expressed by delegates and NGOs at the Monterrey summit. Defenders of global taxation use several lines of argument to promote their cause, which concerned Americans must be aware of. The most current is the notion of "global public goods," a recently minted term referring both to global things (such as the air we breathe and the waters of the world's oceans) and causes stemming from the global common interest (the eradication of polio or the alleged need to reduce greenhouse gas emissions). Because of the existence of such global goods, runs the argument, a global authority must be empowered to regulate their use and levy international taxes and user charges, just as local governments are typically empowered to do the same for public goods at the local level. Proposals like the carbon tax, the aviation fuel tax, and taxes on airspace, oceans, and even outer space are all justifi ed with this argument. In practice, the notion of global public goods amounts to unlimited taxing authority for the United Nations, authority that extends even to the air we breathe, the water we drink, the electromagnetic spectrum by which we communicate, and even the space surrounding the planet we live on!
Another sly argument, used particularly to defend the Tobin tax, is that such taxes are a needed check against the forces of globalization. The reader might wonder why NGOs allegedly opposed to globalization would support a global tax that would so transparently empower global government. The truth is that most UN-accredited NGOs are socialist or outright Marxist, and are only concerned about commercial globalization, that is, the supposed exploitation of the world's poor by villainous multinational corporations, currency traders, and other private-sector international players. By contrast, these same NGOs are exuberantly supportive of political globalization, and see unfettered socialist world government as a cure for all of the world's injustices. Their websites and literature consistently portray currency transaction taxes as a blow against globalization and "neoliberalism" (whatever that may be).
Global taxes are also promoted as a means to redistribute the world's wealth (a prominent agenda item at Monterrey), protect the environment, and promote economic stability. All of these objectives, of course, have long been pursued at the national level by leftists of every stripe.
Supporters view global taxes, and particularly the Tobin tax, as an "idea whose time has come," in the words of British NGO War on Want's website. But implementation is still a tricky prospect, especially with the U.S. government standing in the way. A policy paper entitled "Global Taxes for Global Priorities," written by James A. Paul and Katarina Wahlberg and published by the Global Policy Forum and two other organizations, gives a detailed overview of the globalists' long-range strategy to make global taxes a reality. The paper is evidently not intended for general public consumption, given its candor and detail. It was distributed at a round table meeting on global taxation in Monterrey that was off-limits to the press, but THE NEW AMERICAN managed to obtain a copy.
The ultimate goal of the global tax movement is stated in the paper's introduction, along with a hint of the strategy to be pursued: "Some day, an international political authority will levy global taxes, but at present a robust authority of this kind 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." In the meantime, though, the globalists plan to implement a program of "tax harmonization," which Paul and Wahlberg explain as a necessary intermediate step to avoid too blunt a challenge to nations' sovereignty: "Global taxes can only gain legal standing through a treaty agreement between nation states, in an 'internationally-harmonized tax regime.' Each participating n ation will raise the taxes through its own taxing authority, based on a globally agreed tax rate and taxing policy plan. Each will then pass an agreed portion of the revenue along to an international organization for spending at the global level. This arrangement does not require fundamental changes in international law and so it avoids a direct challenge to state sovereignty that a global taxing authority would pose.... Though nation states will initially collect and decide (through international consultation) on the spending of global taxes, new citizen pressures for global oversight will emerge."
"Tax harmonization" or "cooperation" as a way station to full-fledged global taxation is being promoted by the Organization for Economic Co-operation and Development (OECD) as well as the IMF and the World Bank. In a joint proposal by the IMF, OECD, and the World Bank distributed at the Monterrey summit, "Developing the International Dialogue on Taxation," the staffs of these three influential international organizations recommend creating an International Tax Dialogue (ITD) to "[enhance] the relations between ... international organizations and between national tax authorities." While the document is careful to insist that the LTD "will not at any stage have any power to make, enforce, or mediate binding tax rules," the real purpose of the ITD is hinted at in the concluding section of the proposal: "The proposed International Tax Dialogue aims to enhance discussions on the strengthening of national tax systems, which in turn will assist the mobilization of tax revenues for development highlighted in the pre paratory documents for the UN Financing for Development conference." (Emphasis added.) In other words, the IMF, World Bank, and OECD envision international tax cooperation as a painless way to accustom sovereign nation-states to the notion of international meddling in tax policy, with the supposedly benign goal of international development.
Technical Note No. 1, one of the documents used in the preparation of the Monterrey Consensus and subtitled "Existing proposals for enhanced international cooperation in tax matters," gives a still more candid look at some of the possible uses of an international tax cooperation regime. Section H, "International system of coded identification for all individual and corporate income taxpayers," is especially troubling. This recent proposal recommends, in effect, an international taxpayer database containing information on "the jurisdiction in which the taxpayer resided or was registered, and ... all [jurisdictions] from which she, he, or it derived income. Knowledge of the identity of the taxpayer attached to each code number would be confined to the tax authorities of the jurisdictions referred to in the code number, but information relating to the taxpayer's income would be shared among them." That is to say, the UN now wants to compile a register of every taxpayer in the world, a truly chilling prospect an d a wake-up call for those complacent souls who assume that the UN won't affect them personally.
The U.S.-supported Monterrey Consensus itself includes a plug for tax cooperation, in section 64: "[We encourage strengthening] international tax cooperation, through enhanced dialogue among national tax authorities and greater coordination of the work of the concerned multilateral bodies and relevant regional organizations." The inference is clear: The framers of the Manterrey Consensus, as well as powerful international entities such as the World Bank and the IMF, all favor a global taxation regime, but are using a gradualist strategy, starting with tax harmonization, to achieve it.
Thus, even though the Bush administration has officially objected to global taxation, the forces that favor it are powerful and determined. Internationalists are now willing to implement such a tax piecemeal, to ratchet up the pressure on an isolated United States, rather than wait for America to join the "consensus." The authors of "Global Taxes for Global Priorities" acknowledge that "in light of strong opposition from the United States and to a considerable extent from Britain as well, global taxes will not at first include all nations.... Within international law, very few treaties, conventions and bodies embrace all nations. The International Criminal Court and the Kyoto Protocol are important initiatives that will go forward without the participation of the United States and some other significant parties. Global taxes are likely to follow a similar path. Advocates now recognize this and develop proposals based on non-universal options.... Non-participant states may eventually join the tax regimes, for a variety of reasons. They may come to see advantages or shift when pressured by their own citizens. Tax regimes may be set up with mild penalties for non-participants. Non-participants may also be lured into joining because they would want to take part in the goal-setting, oversight and benefits of the resulting global funds." That is to say, once even a partial international tax regime is in place (and the European Union is frequently proposed as a good point of departure), non-participants will be pressured, browbeaten, ostracized, and penalized until they submit.
One Step Back, Two Steps Forward
Another trick some advocates of global taxation are suggesting is that new global taxes be "revenue neutral" -- that is, that national taxes be lowered to accommodate new global imposts, so that taxpayers will not at first feel the additional pain of new tax obligations. Paul and Wahlberg suggest that "global taxes could theoretically be revenue neutral, by harmonizing national tax reductions that would offset the new globally-negotiated levies." This means that, once an international framework for tax harmonization is agreed upon, the globalists will have an easier time coordinating and manipulating tax rates to disguise the impact of new global levies.
Over time, initially small, inobtrusive global taxes will grow and diversify. Write Paul and Wahlberg, "a first global tax might be a small measure that sets important precedents while evoking few powerful opponents because it produces only small amounts of revenue and has only very modest policy steering and re-distributional effects. CTTs and carbon taxes set at a very low level might meet this requirement. International excise taxes would be an interesting, low-target alternative -- for example, a tax on tobacco products. A global tobacco tax would complement the anti-tobacco campaign of the World Health Organization, advocates could promote it as a health tax, and it would add a small additional increment to nearly-universal national taxes already imposed on these products."
"Global Taxes for Global Priorities" ends on a confident note: "The time has come to build unstoppable worldwide campaigns, because coordinated international public pressure yields results. In the case of the CTT, a campaign is already underway. Many national and regional NGO groups have coordinated their efforts globally since March 1999 and the positive results are clearly visible. The carbon tax now needs a campaign of its own.... The campaign for an International Criminal Court provides interesting precedents of wide NGO coalitions and nation-specific campaigns.... As recently as the mid-1990's, global taxes seemed a distant hope -- bedeviled by technical concerns, opposed by powerful interests and blocked by an intractable United States government. But today the political balance has shifted. NGOs have built a worldwide mass movement and put global taxes on the political agenda."
In sum, the campaign to levy global taxes has acquired a full head of steam. It's being promoted by many European heads of state and powerful international organizations like the IMF and the World Bank, not to mention the UN itself. It's being propelled towards fruition by an aggressive, sophisticated, and carefully coordinated alliance of well-connected NGOs, and it has made sudden and stunning progress in the past four years.
It is folly to suppose that the United States can remain associated with the UN and not ultimately succumb to a global tax regime. That this threat doesn't worry most Americans is evidence only of our collective complacency and ignorance of the strategic methods and rhetorical subtlety of the globalist movement. We cannot continue to be entangled in the United Nations system and yet remain aloof from its goals and policies. If recent events are any indication, global taxes in some form will soon become a reality on at least a limited basis, most likely among the member states of the EU. When that occurs, the so-called international community will pressure the United States relentlessly to sign on to global taxes, until, as recently occurred when the Bush administration adopted key principles of the Kyoto Protocol, Washington insiders decide to compromise. The timing of such a move is immaterial; it will come unless we get out of the United Nations entirely.
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|Publication:||The New American|
|Date:||Apr 22, 2002|
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