Major action must be taken to access ‘hidden’ finance to fulfil SDGs
UN High-level Dialogue on Financing for Development – 26 Sept
Civil society groups call for urgent reforms to combat illicit financial flows, abolish tax havens, introduce a global wealth tax and an intergovernmental body on tax cooperation.
New York, 26 September: The High-level Dialogue on Financing for Development which follows the SDG Summit, must urgently find ways to access the funds governments need to achieve the SDGs, say members of the Reflection Group*.
“The 2030 Agenda cites the enormous disparities of opportunity, wealth and power as one of the immense challenges to sustainable development. And yet governments are not doing nearly enough to tackle these challenges, despite a plethora of robust policy proposals emanating from civil society, academics and others”, say Kate Donald from the Center for Economic and Social Rights and Jens Martens from the Global Policy Forum.
Growing accumulation of private wealth while governments become poorer
Since 2015, the growth in global inequality has accelerated, with a small group of individuals and companies getting richer and richer. This concentration of economic power and wealth buys political influence, and may explain the adoption of regressive tax policies: since the 1980s, statutory corporation income tax rates have declined from an average 45% to 25-30%.
“At the same time governments are become poorer, so are forced to cut state services, adding to this wealth inequality, and hampering the achievement of the SDGs”, says Martens. The irony is that governments are now calling on those same private actors that have accumulated such wealth to run the public services they need to keep their countries afloat.
The rich have a much bigger ecological footprint as they consume more, and can influence decision makers to prevent robust action to fight climate change which would contradict their interests.
Urgent action needed to combat illicit financial flows
The scale of tax evasion and tax avoidance has ballooned, and the way wealthy private individuals and multinational companies stash their money in tax havens is being singled out for urgent action during the Financing for Development High Level Dialogue. Donald and Martens suggest the following measures:
- institute a serious crack-down against illicit financial flows, including through mandatory country-by-country reporting for transnational corporations, effective measures against the manipulation of transfer pricing and taking action against tax havens;
- move decisively towards the introduction of a Global Asset Register to record ownership of equity, bonds and other financial and non-financial assets;
- introduce a globally coordinated wealth tax, along the lines suggested by economist Thomas Piketty, such as a 1% tax on wealth of $1–5 million, and 2% tax above $5 million.
- establishing an intergovernmental body on tax cooperation under UN auspices in which all countries participate equally.
“The policies we suggest are practical and doable, if the political will can be mustered”, say Donald and Martens. “We believe they could be the prerequisite to unleash the transformative potential of the SDGs, and fulfil their ambition to realise the human rights of all”.
For more information or to talk to Jens Martens or Kate Donald, please contact: Daphne Davies: Tel/WhatsApp:US: +1 917 291 3560; UK: +447770230251, Daphnedoubled@gmail.com