We need a Global Wealth Tax
to the financial crisis, global poverty, and climate change
In the anti-Nazi poem "Alfabet" (1934), Bertold Brecht wrote:
rich man and a poor man stood and looked at each other. The poor man
said palely: "If I was not poor, you would not be rich.". (Reicher Mann
und armer Mann standen da und sahn sich an, und der Arme sagte bleich:
"Wär ich nicht arm, wärst du nicht reich.")
Today, this is not true. The rich are now in a position to eliminate
poverty while remaining rich. Apart from obvious measures such as
obeying the law (which counts out tax havens and exploitation of
developing countries by multinationals) (more),
and little-known solutions like combining unconditional basic income
with flat income tax to create a truly progressive tax-welfare system (more), the fairest way to end poverty is by means of a globally harmonized wealth tax.
change.org petition was written in 2012 and is now closed. The complete
original text with commentary and explanations is here
and additional explanations are here.
petition text was as follows:
To UN, IMF, World Bank,
G20: National governments cannot pay their
debts, a billion people are living in poverty worldwide, and urgent
warnings about climate change are being ignored. In all three cases,
the main problem is money. But the money is available - in abundance.
Economic globalisation and technological developments are making the
rich megarich. Worldwide, there are now over a thousand
US$-billionaires. As concerned citizens across the world, we call on
relevant global organisations such as the UN, IMF, World Bank, and G20
to negotiate a global agreement to tax all wealth - including all
companies, trusts, and wealthy individuals - at a single rate of about
1% per year, in addition to existing non-wealth taxes. Exceptions
should be limited to genuine non-profit organisations and individuals
whose assets are less than about US$ 1 million.
A year later in 2013, the problem and its solution were presented by
Thomas Piketty in his ground-breaking book Capital
in the 21st Century,
with a wealth of historical data and economic theory. The book
attracted much more publicity than this petition, but in the end it
was also ignored. Picketty recommended a progressive wealth tax
according to the principle that tax should be paid in proportion to the
ability to pay; we recommended a flat wealth tax on the assumption that
a simple tax is harder to evade and any global wealth tax is better
than none at all.
The proposed tax would be collected within countries using existing
mechanisms, according to a global agreement. If wealth tax can work in
France, Spain, Iceland, India, Netherlands, Norway, Switzerland, and
Italy, it can work everywhere. The global community (e.g. the G20)
agree at last to end global tax evasion; tax havens that did not
comply would face economic sanctions. If Iran can be forced to
have its nuclear facilities inspected, tax havens can be forced to
reveal the bank balances of their clients. All citizens would be
required to declare
their wealth, just as they now declare their income; Forbes
magazine already estimates the wealth of the world's richest
companies and individuals would assign their wealth to different
countries according to globally agreed criteria. Tax offices
would establish a budget for
investigating wealth declarations (e.g. 1% of
the 1% tax, or 1/10000 of the tax office's initial wealth estimate).
Undeclared wealth, when discovered, would be taxed at a higher
rate, say 5%. Existing
methods for punishing tax evasion would apply and might include jail
sentences or loss of citizenship. Another
possibility is to tax stock exchanges, requiring every company
to pay 1%
of its market capitalization (share value x no. of
shares) every year.
Every year, the wealth
gap gets wider,
and nothing is done. Few economists are talking about the
problem, as if they had no idea what was going on or had no
responsibility toward to the society that pays their wages (at least
for university professors). Economists who care about this
problem are marginalized by
their academic colleagues. Caring about other people seems too
embarrassing for the distinguished academic discipline of economics,
with its peer-review journals and high rejection rates. The idea that
economics and ethics are related (and always have been) is still being
presented as if it were novel (link)
- "soft" economics for mediocre or desperate scholars. The academic
literature on economics and ethics (example)
is sidelined both academically and politically. National election
dominated by local and regional issues; the most important
issues are ignored as if the future (and our own children) did
Meanwhile the human race is progressing, slowly but surely, toward
economic, political, and environmental meltdown. These three aspects
are feeding on each other: the wealth gap is undermining democracy,
which in turn is inhibiting the sustainable energy revolution. The
worse global warming becomes, the greater will be the economic and
political consequences. The ultimate losers will be human beings, who
will die in hundreds of millions later this century as a result of the
failure of today's political, business and academic leaders to solve
this problem. The main reasons for the deaths of those hundreds of
millions will be hunger and lack of drinking water (climate change),
political unrest and violence (including wars over natural resources),
and poverty (which increases the vulnerability of individuals and
families to the other problems).
Why do humans so steadfastly refuse to talk about the simplest, most
obvious solutions to their own problems? Perhaps the ultimate problem
is psychological: victim mentality.
psychologists do not seem to talk about that, either, and if they do,
they fail to make the big political connections that would be necessary
to solve these problems. Correct me if I'm wrong.
The following comments were entered to the change.org website. It's not
often that you receive comments of this quality after an open petition:
would be a relatively easy tax to collect, at least on the $12.3
trillion of cross-border financial assets that we at Tax Justice
Network estimate is
now parked in just 50 global leaders in international private banking.
Make it an annual withholding tax on "anonymous" financial wealth,
including criminal money, and devote the proceeds to multilateral aid
for climate change relief.
S. Henry, Sag Harbor, NY
supply of investment and excessive saving on a global scale. This
proposal will result in surplus savings invested into long term
Robbins, Cheltenham, UK
Deploying a 1%
tax on wealth means that any individual on earth would have to
reimburse during its lifetime most of the wealth enjoyed privately.
That makes sense to leave this world having paid ones debt to the
community. I love this idea.
de Basquiat, Versailles, France
This is a
workable solution to a major economic problem. Those paying the tax
would hardly notice it, but it would make an enormous difference to
Sloboda, London, UK
levels of inequality are inhumane. We're entering a post-scarcity
world, yet our socio-economic systems resemble a gold rush that
inflicts suffering on a vast share of the world's population.
Bukaj, Warsaw, Poland
is the only
way to bring inequality, in the UK and globally, under control - which
we desperately need to do. It's just a bloody shame the richest people
in the world control much of the political spectrum as well as
economic, and even worse the majority of the world's press is either
owned by them or generally sucks up to them. Come on folks, we're going
to need people power for this one! Spread the word!
Stokes, Portsmouth, UK
governments had the guts to say to voters we need to tax you more.
Generally, voters are looking for a government that will reduce their
taxes, and increase their public services. They're dreaming. I am able
to pay a bit more tax. I'm not sure if this idea will work but it
should be seriously considered.
Parncutt, Hawthorn, Australia
for this group to gradually steal the resources of all humanity, to
profiteer from wrecking the environment, and to make our species
extinct. By paying fair share, it would release resources to pay for
the restoration of the earth, communities and the infrastructure of the
Marinkovich, Port Townsend, WA
rich poor gap
is a brake on human maturity. This will provide at least a palliative
for massive suffering., and hopefully lead on to profound cures for our
ailing sense of inclusive justice.
Challen, London, UK
As I'm convinced
such a tax is necessary to sustain peace between the industrialized
nations. Furthermore we won't have a planet to live on in a few decades
if we continue polluting our environment and doing nothing to preserve
Kastner, Graz, Austria
central cause of social dysfunction and a threat to democracy. Wealth
is NOT correlated to level of work or creation or contribution in
Wolf, Ann Arbor, MI
To try to eliminate global
poverty and make for a more fair and just world
Ward, Englefield Green, UK
I want to pay my debits and but
a house for my children.
Miranda Kekana, Pretoria, South Africa
is an issue that desperately needs solving!
Brame, Bury St Edmunds, UK
a great idea!!! I'm not rich but I would happily pay 1%
Davidson, Aldershot, UK
long as it's funded to benefit social programs I think almost everyone
Coats, Los Angeles, CA
schools are being starved of cash so that more money can trickle up to
those who already have more than then can possibly spend.... 2% would
be better - with the extra 1% devoted to implementing clean energy
generation across the globe
Dinwoodie, London, UK
believe in taxing the super rich. No one person needs a billion pounds
Gleeson, Manchester, UK
If the USA can print 7% of its GDP to save it's economy and the assets
of the mega rich then perhaps the entire world should be printing 7% of
it's GDP and the money used to address all sorts of social issues.
Currency depreciation would not occur if everyone agrees to print money
at same % of GDP. Likewise inflation would not be an issue because it
has been proven that inflation can be effectively controlled when a
central bank targets inflation and only inflation. This inflation
fighting policy was introduced in Australia in the early 1990's. By the
late 1990's many of the world's central banks had adopted this
inflation control policy and it has worked brilliantly through 2 stock
market bubbles and a property bubble.
creo en la justicia social.
Taguas Sanchez, Amsterdam, Netherlands
Reichen sollen sich angemessen beteiligen
beings are so destructive. I sometimes think we're a kind of plague,
that will scrub the earth clean. We destroy things so well that I
sometimes think, maybe that's our function. Maybe every few eons, some
animal comes along that kills off the rest of the world, clears the
decks, and lets evolution proceed to its next phase.”
Michael Crichton, The Lost World
clear. The planet is not in jeopardy. We are in jeopardy. We haven't
got the power to destroy the planet - or to save it. But we might have
the power to save ourselves.”
Kanitz, Stuttgart, Germany
global warming is real and we need to do something about it. NOW.
Calcagno, Montevideo, Uruguay
the poor and keep more and more people from going poor. The recession
we're facing now could go worse than the great depression or be just as
Paich, Loveladies, NJ
wealth gap is growing, but a more progressive tax than a single rate is
needed to diminish the gap.
Lawson, Raglan, New Zealand
need to care for the poor of whom there are millions. The rich do not
need our support.
Kirkby, Sheffield, UK
under debt - consider how the Venetians and their fiscal plans have
caused problems since the 1340s - read more in the Palmerston's Zoo
papers at Schiller.
used to be
laws for 7 year debt relief and 50 year write offs - not onstant debt
selling which hits the poor whilst the rich laugh and use it as a form
of eugenics by destroying individual health by stress, communities by
destroying local impetus in favour of big brother
Hepworth, Brighouse, UK
rich keep getting richer while the poor keep getting ignored.
Macnamara, Perth, Australia
you have 100
cars in your garage you are not paying enough taxes or giving enough to
charity. I used to deliver pizzas, and I also know the vast majority of
wealthy individuals even tip poorly compared to normal or even less
fortunate people. I guess us reggos don't have that fire of greed
burning in our soul in a permanant state of unquenched desire.
Sandler, Atlantic Highlands, NJ
important that Americans know their Government are impoverishing
thousands of low-income Americans.
Marquez, Miami, FL
excellent petition about the most urgent issue of our time
lane, Hoganas, Sweden
the only way to a fairer economy
Gustavsson, Höganäs, Sweden
have to think of future generations.
Toivanen, Jyväskylä, Finland
they're criminals that must be condemened and also pay taxes.
Tuller, Buenos Aires, Argentinia
you have the ability to help (your are wealthy), then you have the
Leaper, Penzance, UK
equal incomes and to do at least SOMETHING about the incredible
injustice of the fact that some people DIE through lack of food while
others can afford mansions, luxury food, and all sorts of other
goodies; in many cases not even as a result of anything they've DONE
but simply because of who their family is which is hardly something
they have achieved!
King, London, UK
Boleloucky-Bolen, Vienna, Austria
increasingly "global" world, we should all take responsibility globally
- including the richest, the profiteers, the self-seekers.
Cary, Mishima, Japan
long-term financial melt-down is the result of the games played by the
rich with economies of the world (both of countries &
They can only do this because of their EXCESS wealth. It needs to be
redistributed to all the rest of us - and the world - whence it was
Hollingsbee, London, UK
change and enormous wealth disparity are both serious problems that
else is going to do anything?
wealth as a means of reducing poverty is an obviously sensible idea. In
these terms, poverty means having no access to proper toilet facilities
and is relevant to 40% of the planet's population.
Quiney, London, UK
of life on this planet is at stake. What a legacy to leave
Owen Davies, Egham, UK
lessen the gap
between rich & poor & to give poorer people the chance
decently with food, shelter & healthcare etc.
Coles, villefranche de Rouergue, France
children don't have enough food to grow their bodies and feed their
Neve, Birkenhead, New Zealand
policy needs more than just a bigger break with the economic and moral
assumptions of the past 30 years. It needs a return to the conviction
that economic growth and the affluence it brings is a means and not an
end. The end is what it does to the lives, life-chances and hopes of
people. ... The test of a progressive policy is not private but public,
not just rising income and consumption for individuals, but widening
the opportunities and what Amartya Sen calls the "capabilities" of all
through collective action. But that means, it must mean, public
non-profit initiative, even if only in redistributing private
accumulation. Public decisions aimed at collective social improvement
from which all human lives should gain. That is the basis of
progressive policy - not maximising economic growth and personal
incomes. Nowhere will this be more important than in tackling the
greatest problem facing us this century, the environmental crisis.
Whatever ideological logo we choose for it, it will mean a major shift
away from the free market and towards public action. ... And, given the
acuteness of the economic crisis, probably a fairly rapid shift. Time
is not on our side." (Eric Hobsbawm)
Fladischer, Leoben, Austria
understand game theory. Because I have children. Because humanity needs
a moral upgrade, and those for whom the current system works will not
change by themselves.
Soutar, Dalkeith, UK
suffering globally has to come to an end. It's immoral and it's
destroying our planet and its citizens.
Martin, Northolt, UK
not be required to fight starvation. Enough food to live should be the
right of every human. Like a good Samaritan law - if you can afford to
feed someone who is starving it should be your legal obligation to.
Murphy, Birmingham, UK
the world needs to share its wealth not just for the sake of the poor
but for the conscience of the rich.
Baughan, Dronfield, UK
has no value compared to life.
Odlum, Leeds, UK
am part of the 99%.
Elvidge, South Molton, UK
a very easy way to make an immense difference, if the relevant bodies
can be made to agree, - a big IF, but certainly important to try.
Williams, Crewe, UK
a 1% tax can help us to allocate monetary and material resources more
Kaup, Graz, Austria
transaction, even if I buy a single apple, I pay 10-20% taxes (depends
on product, country, etc). How come we pay taxes when it comes to
food, but people who own great sums of money don't [have to] contribute?
Brabec de Mori, Gratwein, Austria
Winkler, Graz, Austria
the right thing to do to help reduce the deficit.
Holder, Waco, TX
need the world in equlibrium.
Šfiligoj, Nova Gorica, Slovenia
because we need to make all that we can to tacke existing problems of
poverty and environmental disequilibrium.
Škerbinc, Ljubljana, Slovenia
want to see
hunger and poverty eradicated asap and for all time, and for every
person to have the necessities of life - in a word: JUSTICE!
Reinhard, Mangonui, New Zealand
Weltverbesserung unterstütze ich, auch wenn ich meine, jede/r
uns sollte zunächst in einem kleineren und
Kreise seine Kräfte einsetzen - hier ein konkretes Beispiel
Becke, Graz, Austria
I die I would like my grandchildren to be able to enjoy the same
beautiful world that we enjoy today.
Parncutt, Graz, Austria
Eder, Bogazici, Türkei
more may be in this position because others have less, because that is
the way the balance often works. We need address urgent problems of
poverty around the world and this is one simple way to do it.
Parkinson, Tonbridge, UK
is a long reasoning behind, but very briefly: because there is no other
way for peace and freedom.
Lenz, Markgröningen, Germany
will improve the quality of most people in the world.
Canizares, Harrisburg, PA
paltry compared to what the super-rich take from everyone and our
environment, it's a good principle. The only better way is to stop the
accumulations before they happen by shared ownership of everything!
Maizlish, Los Angeles, CA
overdue to flatten the playing field.
Macomber, Alfombra, Baru, Costa Rica
Boris, Bruniquel, France
Berthillier, 09400 Gourbit, France
Busser, Le Tampon, Réunion
Tagliaferri, Saint Denis Reunion, France
Everyone has to participate for a better world!
Saury, Toulouse, France
I have children.
Horgan, Kensington, MD
The opinions expressed on
this page are the
opinions. Readers who know and care about this topic are asked to contact the author with suggestions for improving or extending the content: parncutt at gmx dot at. Back to Richard Parncutt's homepage