Tax the rich

Published: Sunday 15 August 2004

The United Nations (UN) is set to take center-stage in the longstanding controversy over new sources of innovative funding for the world's poorer nations. The proposals on the table include a carbon tax on fuel use, the 'Tobin tax' on currency transactions, a levy on international sales of weapons, a global lottery and a tax on international airline travel.

According to Daphne Davies of the Brussels-based LDC Watch, a non-governmental organisation monitoring the world's 50 poorest nations, two effective fiscal tools for use within Least Developed Countries would be an environment tax, based on the 'polluter pays' principle, and a global tax on arms sales.

The industrialised nations account for more than 85 per cent of arms sales. Their aversion for this tax is then natural. However, if implemented, just one per cent of arms sales paid each year into the global fund, would raise millions of dollars.

Ruby van der Wekken of the Helsinki-based Network Institute for Global Democratisation hailed the proposal for a tax on currency transactions as the most viable suggestion of all. Its dual effect (decrease in speculation and more resources for democratically decided "good issues") makes it appealing, she said.

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