Interesting report on a social protection floor: a rights-based poverty reduction programme, as proposed by the ILO, in between the World Bank 'as if' poverty reductions, and a universal social protection system. An analysis comparing different proposals will follow soon.
Poverty reduction and redistribution
Let me start by giving a very simple outline.
Formally, poverty reduction still is the first priority of development and of development cooperation. And what some of us knew already before 1990 - the year in which the World Bank put poverty on the international political agenda - and what all of us should have learned since then, is that you cannot fight poverty without tackling inequality.
Tackling inequality, in turn, implies on the one hand a fair tax system and on the other hand a universal social protection system. Now, in order to pay for such a social protection system, you need financial resources. And these financial resources can be domestic or international. Which means, in the end, that if one takes poverty reduction seriously, one has to organize a solidarity system or, in the old terminology a national and a global redistributive system.
The G20 finance ministers and central bankers have put off an immediate decision to weigh up a global financial transaction tax (FTT) proposal at the forthcoming G20 Summit (Cannes, 3-4 November 2011).
The two-day Ministerial Meeting in Paris took place against the backdrop of huge protests in US and Europe, galvanized by the Occupy Wall Street movement. At the Paris meeting, G20 finance ministers discussed myriad policy and implementation issues concerning world economy and financial markets. As anticipated, eurozone sovereign debt crisis dominated the discussions and the communiqué pressed Europe to act decisively on resolving the crisis at the forthcoming EU summit next week.
A couple of days ago II highliighted a report from Cayman about a meeting of offshore lawyers where it seemed there was widespread agreement that the system of tax information exchange agreements that the OECD, UK government and tax haven authorities say delivers secrecy in the murky world of secrecy jurisdictions really does not such thing.
ActionAid have produced another fine report, this time about the use of tax havens by multinational corporations listed on the FTSE 100. The statistics are staggering: for example more than half of the financial sector’s overseas subsidiaries are in tax havens. More precisely:
- The FTSE 100 largest groups registered on the London Stock Exchange comprise 34,216 subsidiary companies, joint ventures and associates.
- 38% (8,492) of their overseas companies are located in tax havens.
- 98 groups declared tax haven companies, with only two groups, Fresnillo and Hargreaves Landsdown, who did not.
- The banking sector makes heaviest use of tax havens, with a total of 1,649 tax haven companies between the ‘big four’ banks. They are by far the biggest users of the Cayman Islands, where Barclays alone has 174 companies.
- The biggest tax haven user overall is the advertising company WPP, which has 611 tax haven companies.
- The FTSE 100 companies make much more use of tax havens than their American equivalents.
- There are over 600 FTSE 100 subsidiary companies in Jersey (more than in the whole of China), 400 in the Cayman Islands and 300 in Luxembourg – all tiny tax havens.
At their meeting in Paris yesterday, the G20 Finance Ministers did not agree on the introduction of a Financial Transaction Tax at global level. Next week, the European summit will discuss on the possibility of an FTT at European level.
However, as the Independent writes: 'A statement by G20 finance ministers meeting in Paris warned that an EU summit next weekend must agree a long-promised package of new measures to calm markets and prevent the crisis spreading by "contagion"...'
What the EuropeanCommission calls 'Tax policy challenges foir economic growth and fiscal sustainability'.
The European Commission published its communication on its future perspectives in development policies.
Kavaljit Singh explains why India has changed its position on the FTT and how such a tax can serve as a first step towards building international cooperation on global financial reforms.
Very very interesting reading in times of crisis ...