Unknown to the majority of Americans, detailed
proposals have been circulating within the international community
regarding a forthcoming global tax. Unlike current state or federal taxes
- which are to be used for national or local infrastructure - the money
derived from this levy will go directly into the coffers of the United
Nations. Already one of the G7 has set the precedent of officially
accepting such taxation, and other G7 nations are now considering it.
Proponents of the United Nations have long argued that
the accepted system of UN funding via national contributions has been, for
the most part, unsatisfactory. Increasingly, these advocates have been
calling for independent funding, stressing the need for monetary
alternatives that would give the UN a financial shot-in-the-arm.
Towards this end, the United Nations Economic and
Social Council has been looking at a variety of fundraising ideas,
including the creation of a world lottery, a UN credit card program, fines
for breaking international laws, and a UN Security Insurance Agency. This
last proposal is especially unique. Smaller countries that lack
significant military forces would pay insurance premiums to the United
Nations. In response, the UN would guarantee the insured nation’s
security by employing "international forces" against potential
military threats.
Internationally based surcharges have also been
proposed. The UN sponsored Commission on Global Governance advanced a
variety of user fee arrangements in their 1995 report Our Global
Neighborhood. According to the report, surcharges could be levied on
international airline tickets, ocean-going maritime traffic, and on
non-coastal ocean fishing activities.
Of all the plans and proposals, one has stood above all
others - the "Tobin Tax." The brainchild of US economist James
Tobin, this tax calls for a universally accepted levy on foreign currency
transactions. Considering the trillions of dollars traded each year, the
fundraising potential is staggering. And, as a selling point to national
governments, it’s being trumped as a way of clipping the wings of
"rogue" currency traders. In fact, the Tobin Tax has been so
well received among various global policy makers that in 1999 the Canadian
federal government officially endorsed it.
Introducing the concept to the Canadian House of
Commons on October 28, 1998, Member of Parliament Lorne Nystrom, described
the currency charge as "a feasible part of a new world order."
Elaborating on the fund-raising potential and its
possible uses, Nystrom explained, "If there were a 0.1% Tobin tax on
foreign currency transactions, that would raise, in 1995 dollars, $176
billion US. A Tobin tax of 0.003% would be enough money to fund United
Nations peacekeeping around the world… There would be a strengthening of
international organizations. The United Nations would become a meaningful
world government… There could be permanent international peacekeeping
forces." Canadian political support for the proposal was broad-based.
The Tobin Tax vote, held on March 23, 1999, passed 164 to 83. According to
the MP, and others in favor of the tax, the International Monetary Fund or
the World Bank could be empowered to implement it.
Considering that Canada is Americas largest trading
partner, with commerce trade running in excess of $362 billion in 1999
alone, the Tobin Tax decision takes on special significance. And now
France, among other European nations - and the European parliament itself
- is contemplating the world tax. Brazil has also been discussing it.
Moreover, the tax received considerable attention during the recently
convened United Nations Millennium Forum and Summit. Unquestionably,
international momentum is growing.
Within the US the Tobin Tax has been slow to catch on,
but it is starting to make some political headway. Congressmen Peter
DeFazio (D-OR) and Senator Paul Wellstone (D-MN) announced a resolution
this last April urging the US government to take a leadership role in
enacting the global levy. Certain US special interest groups have also
joined the cause. The California-based Center for Environmental Economic
Development has established the "Tobin Tax Initiative." And the
World Federalist Association, a national "global governance"
lobbying group led by former Congressman John B. Anderson, is also hard at
work to sway US lawmakers towards the tax.
While pressure is mounting to enact the world tax,
major implementation problems exist. The tax would have to be universally
accepted, otherwise non-participating nations would quickly become tax
havens. With this in mind, what enforcement options would be used for
non-compliant countries? Who would ultimately collect the tax and oversee
its use? How would a global tax affect national and regional economies?
And what safeguards would be employed to restrain corruption or to keep
the levy from continually rising?
Initially, problems surrounding design and management
of the tax may seem insoluble. However, the fact remains that we now have
a harmonized global customs and tariffs arrangement, which at one time was
considered as utopian as the presently discussed world tax program. Key
organizations and individuals within the world community are not asking
"if" or "when," but rather "what will it
take?"
World taxation is without precedent. We have no
historical standard to gauge it by, nor can we know the extent of its
effects. This may be a prime example of the global impacting the local,
through new stresses on business and industry, raised consumer costs, and
added constraints upon national sovereignty. In the final analysis, what
we could have is an unapproachable, unaccountable, international
bureaucracy. V
__________________________
Carl Teichrib is the
research associate with Hope for the World (http://www.garykah.org/)
and has attended many of the UN meetings that are dealing with the effort
to achieve global governance.
- See For
Yourself:
- http://www.tobintax.org
http://tobintaxcall.free.fr
