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Sunday, July 29, 2012
Billionaire's tax to help the poor
In searching for new sources of funding, the United Nations this month called for a tax on billionaires to raise money for poor countries. According to the assessment in the U.N. World Economic and Social Survey, an annual tax on the world's super-rich would yield almost $400 billion a year.
That money could go toward improving conditions for the world's estimated 1.4 billion people living below the poverty line of $1.25 per day.
The math seems simple enough, though the politics far less so. The recommendation is not about gouging the super-wealthy, but about finding sources of funding.
Part of the concern is that if the United States turns toward the right in the coming presidential election, support for the United Nations will be further imperiled. Already, rightwing members of Congress have called for blocking all funding of the U.N.
Back to the math, the survey estimates that the number of people around the globe worth at least $1 billion rose to 1,226 in 2012, the highest number ever. Together, these spectacularly wealthy people own an estimated $4.6 trillion in wealth. A tax of just 1 percent on their wealth would raise more than $46 billion.
That estimate may be low. A separate report from the American Tax Justice Network claims that nearly $21 trillion lies in offshore tax havens. That amount is roughly equivalent to the combined GDP of the U.S. and Japan. After paying such a tax, the average billionaire would still be left with $3.7 billion, not to mention whatever lies in the secret offshore accounts.
The top 10 private banks alone managed more than $6 trillion in 2010, up from $2.3 trillion in 2005. A financial transaction tax on shares, bonds and derivatives would raise $70 billion a year. A further tax of only 0.005 percent on trading in the four major currencies could yield $40 billion.
Taxing the International Monetary fund's special drawing rights (SDRs), a reserve source of foreign exchange assets often underused, and a global carbon tax would easily fund high-priority anti-poverty measures.
The unprecedented concentration of wealth in increasingly fewer hands is a remarkable feature of the current age. The fairness of a few individuals amassing such wealth is an important debate, but in the meantime, easing the daily burden of the masses living in poverty is increasingly urgent.
A tax on billionaires would affect the luxurious lifestyle of the world's 1,226 billionaires very little. It would, however tremendously improve the lives of millions of people desperately needing help. These proposed taxes should be supported and enacted.