In full knowledge that the White House and Downing Street will reject it, leaving him looking good for trying, Jacques Chirac proposed a very interesting idea the other day. He suggested we could double the global aid budget by levying an international tax on greenhouse emissions, plane tickets, weapons sales, MNCs, credit card transactions and international captial flows.

Anyone else think it's a great idea?

Well, the only of those I do is credit cards, and that's only if debit cards get lumped into the same basket, so let's go for it. Maybe America will suck less if we start being taxed for destroying the world.

Oh man, I can just hear the American talkshow pundits jumping on this one like a fat kid on a smartie. But anyway.

I don't understand his rationale for putting that list together of Things To Tax.
I can understand wanting to tax greenhouse emissions and weapons sales and even MNCs (hey they'd better pay their taxes somewhere) but credit card transactions and plane tickets of all things? And international capital flows? Why? Are they evil? Why not international cigarette sales or pork-knuckle consumption or people with one leg shorter than the other?

...And since the UN isn't an elected governing body...

Would it be voluntary or mandatory? Who would do the administrative work for this? The UN or the individual countries who agreed to it? How can you tell if they're cooking their books? And how do the countries decide where the money gets spent? Seems unworkable if you ask me.

Airplane tickets because they're tax-exempt in most countries, and plane fuel is a major contributor to global warming. Capital flows because unrestricted capital movement like we have nowadays leads to great financial instability, and rampant speculation can destroy economies. Search for the Tobin tax online and you'll probably find a site arguing for that. Credit cards i have no idea.

It would presumably be organised by an intergovernmental organisation set up by the G8 - like the proposed International Finance Facility. Local enforcement would probably be the responsibility of individual governments, and we have plenty of aid-oriented international bodies qualified to decide where it's spent. It would obviously be a voluntary organisation, and it won't happen unless Washington says yes, which we know they won't, but apart from that it seems perfectly workable.

I would have to say NO to that one. Jacques is not on my list of respectable leaders with the recent oil for food scandal. I would also have to say no, because (as someone else has pointed out) they are not an elected body. From my personal view, the U.S. should pull out of the U.N. completely, since all they do is whine and moan about how little their largest contributor (the U.S.) has given them lately. Their anti-American sentiment is growing (some of it is justified with current decisions by our administration), but with its past and current impotence with enforcing other resolutions, it would be the U.S. and Europe footing the bill yet again. The U.N. has no place taxing consumer transactions in the first place. The precedent this would set is alarming at best.

Let me ammend not just NO, but HE** NO!!!!

This isn't a UN initiative. It's being put to the G8 meeting. The UN has nothing to do with it.

They can be. While a case can be made that ease of capital flow promotes investment; it mostly promotes short term profit taking and unsustainable growth policies.

It works like this. Most of the money is just being shunted around to capitalize markets as they open; functionally being injected to back the plays of punters. Since the money must flow on by the time the market closes, it pretty much definitionally can't be used for investment in the economic sense of the word...capital (in this case, the means of production) formation takes longer than 8 hours.

The rest of the money is invested; but it follows the highest perceived yield in real time. If it should happen that the country where this money has currently settled does anything (like, say, require the most basic worker protections, or put limits on the practice of clearcutting their forests) which might lessen the yield on that investment, the money will be instantly yanked out and sent off to some other country where they make no such concession to their own future. Since there are no taxes or other hinderances on this movement of money; it makes all the sense on the world for the `investor' to do this. Unfortunately, it means bad policies and no ability to plan for the future among the invested.

This makes taxing such flows brilliant, from a global point of view. While it will cut down on the flow of money; it will only be the worthless money which regards financial markets as casinos, and fly-by-night money which promotes looting of third world countries. Anyone who does invest in something will perforce be leaving it there for a while; because the cost of moving the money will make continually chasing the most trivial improvement in yield an assured money loser.

On the other side, you do have to make sure that the money is evenly taxed where ever it goes, and that no one gets to set up capital traps. This is an administrative and diplomatic issue, though; not economic.

A teeny tiny 1% tax applied on a global scale would probably make a huge difference to the global development budget.... If it was administratively workable, and limited to voluntarily participating countries, and it doesn't go to huge stupid infrastructure projects like environmentally catastrophic dams that'll be obsolete in 30 years anyway, sure, I'd back it. And if aid organisations get to decide how the money gets spent, rather than the world's poor countries jockeying politically for it.

From the other side, I can imagine representatives of poor countries decrying the idea as another form of cultural imperialism, if they get no say in where the money goes. Can't please anyone, can you?

Still not in favor of an international body levying taxes to go into some beurocratic nexus of unelected officials' creation.
The fact that it would be voluntary would not apply to the U.S., since our role as a superpower places us in the unique position of having to participate in things that are voluntary to others (especially if they are "humanitarian" in nature). Then again, the world hates us and wishes we would leave them all alone, except when it comes to the money we send them....we need to keep doing that. God forbid we have any say where the money we give foreign nations go. It may be in the form of loans which implies nations will pay us back, but besides Mexico, who has paid off the debts they owe us before we forgive the debt for some political reason?

*edited for typo

Go find and read a copy of Confessions of an Economic Hitman, by John Perkins. We give out money for the most selfish and imperialist of reasons, to turn whole nations into debt slaves; and this chap used to be one of the folks that did it for a living. It's an enlightening, if revolting, look at what's meant by U.S. foreign aid these days.

The US regularly opts out of international agreements and institutions. The ICC, Kyoto, and the UN Convention on the Rights of the Child, just to give a few examples.

Not to mention the ones about Landmines, Discrimination against Women (along with Iran and Sudan), Biological Toxins and Weapons, and Nuclear Testing. It's even gotten out of the Mutual Assured Destruction pact of the Anti-Ballistic Missile Treaty.

The US gets out of lots of stuff. Since when did being a superpower mean other countries get to push you around? That's completely backwards.

If you mean that being a superpower means that you lose face when you opt out of apparently completely reasonable international treaties, it means that all other countries can do is make you look bad. That's it. You've got weapons and economic sanctions galore, they've got public shame. You can play nice guy when it suits you, and ignore them when it suits you. Good or bad, that's the way it is.

The only other countries that get to do this are the world's basketcase dictatorships, and that's because everybody expects them to behave like basketcase dictatorships. Plus 9 out of 10 times people are too lazy to get off their butts and go force them to stop.

Oh really?

26 June, 2001. Letter from the Secretary-General to the
President of the General Assembly.



and



Link here

The similarity is amazing.

Additionally, Chirac's proposal includes a tax on individual arms sales. However,



So Chirac wants a global tax on a $300+ shotgun that a private party buys, but no tax on the $7,954,172 multi-role Rafale sold to other Governments.

Maybe because France has been agitating for lifting the ban on arms sales to China, where EU analysts believe weapons sales could exceed $15 billion dollars. Even if the tax rate were 0.5 percent, that means an additional $75 million dollars that would have to be shelled out. I don't think Beijing would be disposed to feeling too kindly toward Mssr. Chirac over that one.

Yes, a Tobin tax has been proposed by Kofi Annan, as well as many other individuals and organisations. However, this particular proposal was not made to or through the UN, and goes beyond just a Tobin tax.

As for the weapons, the article I read merely said 'weapons sales', which I assumed to mean international weapons transfers. If it didn't, then it should. I'm not trying to defend or praise jacques Chirac in any way - as i said, I think he's doing this as a cheap political gesture - he can get the praise for trying, while the White House gets the criticism for opposing it.

Mr Chirac is quite out-of-touch with reality if he thinks he can justify taxation without representation on a global scale.