We must  tax the rich, for the benefit of all

Dr. Trevor Hancock

17 January 2023

699 words

My recent columns on the need to reduce inequality and social injustice by, among other things, increasing taxes on the rich and introducing or expanding wealth taxes, have elicited responses from some people along the lines of ‘you advocate stealing from the rich’.

But the reality is that the rich have increasingly been taking – stealing, if you like – from the poor in recent decades. This is one of the many damaging consequences of the neoliberal ideology that has dominated political and economic thought and practice since the 1980s.

They do so in many ways. One obvious way is to keep wages low, keep work temporary and part-time, and avoid paying benefits to people, while pushing up prices, especially on necessities. Another way is to avoid paying taxes, or minimising taxes for the wealthy, which shifts more of the tax burden to middle and low-income people, while reducing government revenue and weakening the capacity to assist those in need.

A third way is to move industries to countries that have lower wages, fewer social protections and less effective occupational and environmental protection, all of which reduces costs and boosts profits. In addition, rich countries extract resources from low-income countries, while taking advantage of the same deficiencies, resulting in a transfer of benefits to the rich and environmental and social costs to the poor.

The consequences are documented in the latest Oxfam report on inequality, released this month. Titled “Survival of the Richest”, the report spells out what has been happening in painful detail.

The rich are getting richer, while the poor are getting poorer, says Oxfam. In fact “extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.” Since 2020, the top 1 percent got even more – almost two-thirds of the $63 trillion dollars in new wealth created. The rest of us – the remaining 99 percent – shared the remaining one-third, and you can be sure it was not going to the people at the bottom.

In fact, states the report, over 70 million additional people were pushed into extreme poverty in 2020, an 11% rise, while almost one-tenth of the global population was affected by hunger in 2021. The effects of the pandemic, the war in Ukraine, climate change and corporate behavior, notes Oxfam, have led to soaring food and energy prices that “deals another blow to the world’s poorest people”

Yet many food and energy companies in particular are making unacceptable windfall profits. For 95 food and energy corporations that made windfall profits in 2022, Oxfam notes, 84 percent of the $306 billion in windfall profits they made went to shareholders.

And yet, reports Oxfam, “worldwide, only four cents in every tax dollar now comes from taxes on wealth”, while rich people’s (mostly unearned) income “is taxed on average at 18 percent, just over half as much as the average top tax rate on wages and salaries.” Yet taxes used to be much higher, playing “a key role in expanding access to public services like education and healthcare”, until “governments across Africa, Asia, Europe, and the Americas . . . slashed the income tax rates on the richest.”

The way things are, as Oxfam CEO Danny Sriskandarajah states, “is an affront to basic human values.” Moreover, states Oxfam, “extreme concentrations of wealth undermine economic growth, corrupt politics and the media, corrode democracy and propel political polarization”. So, unsurprisingly, Oxfam calls for higher income taxes on the rich, higher capital gains taxes, inheritance, property, land and net wealth taxes, and taxes on windfall profits.

The benefits of just an annual wealth tax of up to 5 percent on the world’s multi-millionaires and billionaires would be massive. Among other things, the $1.7 trillion a year it would raise would be “enough to lift 2 billion people out of poverty, fully fund the shortfalls on existing humanitarian appeals, deliver a 10-year plan to end hunger, support poorer countries being ravaged by climate impacts, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.”

Imagine what raising taxes in all those other areas could do. What’s not to like – unless you are a billionaire or millionaire lacking any form of social conscience.

 © Trevor Hancock, 2023

thancock@uvic.ca

Dr. Trevor Hancock is a retired professor and senior scholar at the

University of Victoria’s School of Public Health and Social Policy

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Coming generations need the UN to focus on their future

Dr. Trevor Hancock

10 January 2023

700 words

There is a long-standing environmental adage that we do not inherit the Earth from our parents, but borrow it from our children. It is a fine sentiment, and the right principle, if only we lived by it. But we do not. Which is why I was so pleased to see the UN Secretary General’s 2021 report ‘Our Common Agenda’ has “a new focus on the world’s young people, and future generations”.  

As an accompanying report put it, this means thinking about the needs of “the next generation – nearly half the world’s population who are under the age of 30 – and . . . future generations – the 10 billion people who are yet to be born this century”. That report, ‘Our Future Agenda’, authored by eight UN Foundation Next Generation Fellows aged 19 – 30, is itself an indication of Mr. Guterres’ commitment to young people.

Mr. Guterres cautions that “unless we change course, we could bequeath to our children and their children a barely habitable world”, adding that they “will inherit the consequences of our decisions – but are barely represented at the global table of decisions.” So he proposes a number of changes at the UN that will strengthen its focus on the future.

Now UN reform may seem a bit arcane, but at a time of unsettling global challenges and instability we desperately need a better-functioning UN to help the world come together to address these major challenges, both for now and for the future.

Mr. Guterres proposes the creation of a Special Envoy for Future Generations “to give weight to the interests of those who will be born over the coming century.” He also proposes a new United Nations Youth Office to “upgrade engagement with young people across all our work, so that today’s young women and men can be designers of their own future.”

The authors of ‘Our Future Agenda’ have their own ideas for how to address “crises that we did not cause”. Their New Deal for a New Generation has three pillars: The right to learn, “where we learn what we need to thrive”; The future of work – “a world where we find secure and meaningful work”, and Saving our planet “a world where we respect our shared home.”

Their aim is to ‘”unleash a new generation” by, among other things, engaging young people as designers of a sustainable future and supporting youth-led movements and civic education to strengthen democracy.

They also propose actions to deepen the engagement of the next generations in the work of the UN. These include an annual High-Level Meeting for Young People, a Global Network of Youth Envoys and a Contract for the Future setting out obligations to future generations.

That latter idea is an important part of Mr. Guterres’ recommendations; he proposes the UN adopt a Declaration on Future Generations. The Declaration, he suggests, would “specify duties to succeeding generations and develop a mechanism to share good practices and monitor how governance systems address long-term challenges.”

He also proposes establishing “a Futures Lab that will work with governments, academia, civil society, the private sector and others, bringing together all our work around forecasting, megatrends and risks.” He expects the Futures Lab to issue regular reports on megatrends and catastrophic risks. 

But he also recognizes that this will not work without some high-level buy-in and direction. So he proposes re-purposing a currently dormant body, the Trusteeship Council – originally set up to supervise the administration of International Trust Territories – “to make it into a deliberative platform on behalf of succeeding generations.”

A key step in turning these ideas into reality, Mr. Guterres proposes, is a Summit of the Future. Now scheduled for September 2024, the Summit is where the world would come together “to forge a new global consensus on what our future should look like, and how we can secure it.”

For all our sakes, but especially for the sake of today’s young people and future generations, we must all hope there is enough goodwill, common sense, and yes, even wisdom to bring Mr. Guterres’ plans to fruition. For our part, we need to let the Canadian government know that this is a priority initiative that they need to get behind.

© Trevor Hancock, 2023

thancock@uvic.ca

Dr. Trevor Hancock is a retired professor and senior scholar at the

University of Victoria’s School of Public Health and Social Policy

The world should pay heed to Antonio Guterres

Dr. Trevor Hancock

3 January 2023

701 words

Regular readers of my column will know that I have frequently quoted Antonio Guterres, the UN Secretary General. A former Prime Minister of Portugal, he was elected to the post in 2016 and re-elected in 2021, He is the most important political leader on the planet today, heading up the most important organization on the planet.

What makes him so important, first and foremost, is that he is the only political leader whose focus is global, with a commitment to the whole world, the whole of humanity, the whole Earth. Every other President, Prime Minister, King or Sheikh has at the forefront of their mind their own country’s interests – or perhaps their own or their party’s or their faith’s interests or their families’ and cronies’ interests.

At its worst, such narrow self-interest can lead to war, as we see in Ukraine and many other parts of the world. It also leads to economic and other policies that might seem to be beneficial to a country, or a segment of its population, but harm others because they are in another country, or harm the environment elsewhere on the planet. Only too often, those policies are also short-sighted, geared to short-term gain even if it results in long-term pain, because (where they have elections) the next election matters, the next generation – not so much.

The second thing that makes him so important, rooted in his global perspective, is that he has been making some remarkably blunt comments on the state of the world and what we need to do to avoid – or at least lessen – the impact of the multiple ecological and social crises we have created.

What makes the UN the most important organization on the planet is that at a time of accelerating global ecological, social and other crises, the UN is key to bringing people and nations together to find common interest, common purpose and a common agenda. It is, as Mr. Guterres has said, “the only institution with universal convening power.”

Yet only too often, the UN gets criticized for its apparent weakness and failings. I think we forget how hard it is to find a common agenda among almost 200 widely differing nations; it makes herding cats look like a walk in the park, to mix my metaphors. In fact, it’s remarkable how often agreements are reached. But after 75 years without major reform, the UN needs updating, to become what Mr. Guterres has called UN 2.0, a UN “fit for a new era.”

So I thought it might be useful to summarise some of what he has been saying about the state of the world and the need for a reformed UN and strengthened multilateral approaches. The best place to begin is with his very important September 2021 report ‘Our Common Agenda’, requested by the General Assembly to mark the UN’s 75th anniversary, and to look for ways to address the challenges of global governance.

In introducing his report, Mr Guterres was clear: “On almost every front, our world is under enormous stress.” He identified those stresses as “the climate crisis . . . our suicidal war on nature and the collapse of biodiversity . . . Unchecked inequality (which) is undermining social cohesion . . . Technology moving ahead without guard rails . . . (and) Global decision-making fixed on immediate gain, ignoring the long-term consequences of decisions.”

But, he noted “the international community is manifestly failing to protect our most precious global commons: the oceans, the atmosphere, outer space, and the pristine wilderness of Antarctica. Nor is it delivering policies to support peace, global health, the viability of our planet and other pressing needs.” As a result, he said, “we risk a future of serious instability and climate chaos”.

To address these short-comings, he proposed a four-point action plan to strengthen multilateral approaches: Strengthen global governance; focus on the future, on young people and future generations; renew the social contract; and ensure a United Nations fit for a new era.

Making the UN work better is vital if we are to successfully manage the challenges facing us in the 21st century, so I will delve into these ideas in more detail in future columns.

© Trevor Hancock, 2023

thancock@uvic.ca

Dr. Trevor Hancock is a retired professor and senior scholar at the

University of Victoria’s School of Public Health and Social Policy