Progressive taxation: the way forward in a fractured world
World Economic Forum (WEF), Davos, blog series
From Sophie Efange, Gender Policy Advisor, Christian Aid
The eyes of the world are firmly fixed on Davos this week ahead of the World Economic Forum (WEF). A handful of the world’s elite descend on the Swiss mountain town to ponder the world’s fate, set against a backdrop of rising global inequalities, continued fiscal austerity, conflict and repeated international humanitarian crises.
All of these are symptoms of a global power structure that protects and maintains the accumulation of wealth and privilege for a small few while continuing to fuel poverty, inequality and turmoil for the rest.
The elites that will be convening at the WEF are right about one thing — the world is indeed fractured. And one of the biggest fractures continues to be the divide between women and men. By the WEF’s own calculations, its Global Gender Gap Report 2017 shockingly identifies that it will now take 100 years — as compared to 83 years last year — to close the global gender gap.
While the greatest gaps appear in the health and economic spheres, with some progress in other spheres such as education, it is clear that efforts at reducing gender inequality have taken a firm step backwards.
This begs the question, what is the role of the Davos elite in reducing inequality more broadly and gender inequality more specifically? The answer: collectively demanding the implementation of a fair and coherent global tax system.
Progressive tax systems as a powerful tool for reducing gender inequality
Tax is one of the fundamental building blocks of our societies. It is the most sustainable source of government revenue and therefore can be a central tool for correcting pervasive gender inequalities and ensuring a state’s legal obligations to securing women’s rights.
Whether you’re talking about the provision of primary school education for young girls, sexual health education for adolescent girls, public maternal health services for pregnant women, or social protection for older women, tax pays for all of it.
However, the ways in which these taxes are raised are equally important and the overwhelming number of multinational corporations represented at Davos are central to this.
Creating a level playing field
Our global tax rules, predominantly written by political elites in the global north and multinational corporations, are outdated, cloaked in secrecy and create unfair loopholes that facilitate tax dodging.
An estimated $170 billion worth of tax revenue is lost each year from the wealth hidden in tax havens by multinational corporations and wealthy elites. This is in addition to a steadily reducing rate of global corporate income tax rates from 38% in 1993 to 24.9% in 2010, largely aided by sustained lobbying for tax breaks which drains the public purse of vital domestic resources.
How many gender-responsive public services could all this lost revenue have funded, especially the gaps in the health and economic spheres identified in the WEF’s Global Gender Gap report?
By the WEF’s own calculations, its Global Gender Gap Report 2017 shockingly identifies that it will now take 100 years — as compared to 83 years last year — to close the global gender gap.
What’s next?
To create Davos’ 2018 vision of a ‘shared future in a fractured world’, its political and economic elites must take a hard look at their role in sustaining an economic system that has only worked for a few.
This same economic system has allowed multinational corporations and a handful of individuals to accumulate unrestricted wealth and, in turn, the political influence to write the rules.
A fair and coherent global tax system, by way of an intergovernmental tax body, is one of the only sure-fire ways of democratically reforming the global tax rules and ending harmful tax practices, illicit financial flows and tax avoidance. It is also one of the only ways of ensuring sufficient public resources to finance gender justice. It’s time to step up.
