Changing the Order and Setting our Agenda: for a World Tax Summit

by Santiago González Vallejo (USO-SOTERMUN) and Susana Ruíz Rodríguez (Oxfam Intermón)

In most instances, the trade union movement and social movements are reactive. We respond to government agendas or the global agenda, which, in turn, respond to the interests of the same group - the global economic establishment. There are also, of course, important overlaps, with the same denomination, climate change, tracing the post-2015 route, etc., and we will find ourselves with different readings of how to respond to them and attempts to break out of the framework of the language imposed by the dominant ‘culture’ or pensée unique. But it is time we introduced our vision.

This is relevant to the problem witnessed over decades with economic growth, which has become visible since the onset of the crisis and that many of us consider part of its cause: growing inequality combined with the fall in wage income as a percentage of GDP, a rise in the number of workers and the gradual fall in the weight of public spending, fed by an increasingly regressive tax system. These overlapping dynamics are derivatives of a globalised economy, with its increase in international trade and greater price competition, free movement of capital and savings, and its absence of universal labour, environmental or fiscal standards, etc., resulting in shifts in production and putting downward pressure on social and labour costs (hence the social cuts), in order to save or attract orders, investments and savings, with the consequences previously mentioned.

Yes, the G20 G20 The Group of Twenty, or G20, is a forum for international cooperation on the most important aspects of the international economic and financial agenda. It brings together 19 countries and the European Union, which together represent around 90% of global GDP, 80% of global trade and two thirds of the world’s population. and the OECD - the rich countries’ club, are officially concerned about tax havens and inequality. But whilst they write their reports and design their tax cooperation agreements, the tax havens remain firmly in place, along with the discretionary tax advantages and tax rates offered by many countries for a privileged few, as seen in Juncker’s Luxemburg, and which ultimately only serve to increase unfair tax competition. There are many tax havens, given the number of distinct jurisdictions in many countries. There are, above all, a great deal of abusive schemes in every one of them, such as the SICAV, the Entities Holding Foreign Securities (ETVE) and the ‘tax lease’ tax breaks in Spain, in addition to the multinationals’ tax dodging through aggressive tax planning and patent box schemes, or the huge fraud capacity of digital corporations, all operating as “apparently” legal tax havens. All over, companies, big investors, property owners, black money fraudsters, corrupt individuals and traffickers are being allowed to hoard money and pay no taxes whilst ordinary citizens and workers watch our rights being curtailed and our social benefits being cut.

If, on top of this opaque share of the cake in tax havens, which could amount to 20 trillion euros in hidden money, and the trillion or so euros lost to tax dodging in the European Union alone - enough to solve various problems facing humanity, we add the steamrolling of progressive taxation and the rise in indirect taxes, like VAT, it is not difficult to understand how one or ten percent of the global population manages to accumulate over 50 and 83 per cent of global wealth. If this continues, by next year the richest 1% will amass greater wealth than the remaining 99%.

If we look at what has been happening in recent decades as a result of tax havens, the flattening of progressive taxation, and the consequences in terms of redistribution and the incapability of public institutions to tackle problems such as poverty, be it in Uganda, Mexico, Chicago, Barcelona or Bhopal, we come to the realisation that focusing on tax issues, the criminal lair of tax havens and the tax competition created by multinational and big wealth owners, is an urgent priority on the global agenda.
Fortunately, preparations are underway for a high-level conference in Addis Ababa, Ethiopia, in June of this year, on financing for development, within the framework of the discussions on the strategic scenario for the Post 2015 Sustainable Development Goals, to take over from the Millennium Development Goals approved by the United Nations in the year 2000.

Many of the big multinationals’ abusive practices are the result of a global tax system tipped in favour of the interests of the major powers, under which the lack of genuine political will and tax cooperation prevent the filling of the holes through which resources crucial to more just social policies in all countries are allowed to drain. Hence our call for these tax justice issues to be discussed by all countries, as equal partners, at a World Tax Summit, and for the strengthening of financing for cohesive development, in preparation for the founding of an intergovernmental tax body, as part of the United Nations, to develop objectives, measures to achieve them, a timeframe, and monitoring and sanctioning mechanisms on global taxation. This would be a transcendental step towards inclusive and cohesive development.

It is not enough that the OECD is now expressing concern over inequality when, since its foundation, it has been cohabiting with and sheltering opaque jurisdictions and those transgressing even minimal taxation rules. Moreover, the reform it has introduced under the mandate of the G20 G20 The Group of Twenty, or G20, is a forum for international cooperation on the most important aspects of the international economic and financial agenda. It brings together 19 countries and the European Union, which together represent around 90% of global GDP, 80% of global trade and two thirds of the world’s population. to tackle the tax engineering practices of major corporations will likely prove insufficient or tipped in favour of the interests of a select few. How can greater consideration be given to these countries/governments/jurisdictions than to those suffering the consequences? This is why it needs to come under the umbrella of the United Nations. Governments must pay heed to the voice of citizens, not the multinationals or wealth owners. Fiscal justice is a priority and the lack of it must be addressed. This is our agenda.