Collecting Tax to Pay for Development

Written on February 27, 2007 by Max Oliva in Development

J.Pozuelo-Monfort, MSc candidate in economic development at LSE
Jaime PM.jpg
In a superb paper commissioned by the Norwegian Ministry of Foreign Affairs, John Christensen et al from the Tax Justice Network expose a number of arguments for the collection of taxes for development.
The text starts with a self-explanatory introduction quoted from the Tax Justice Focus:
“..Wealth held in tax havens in costing governments around the world US$ 255 billion annually in lost tax revenues according to research published in March 2005. This sum is over three and a half times greater than the highest estimate of the additional financial resources to meet the United Nations’ Millennium Development Goals.”
Some further pieces of evidence show how the developed world is too much focused on blaming corruption and corrupted leaders in third-world countries for the money-laundering taking place in their nations. The text also points out that studies such as those of Transparency International focus again too much on how corrupted some of the third-world countries are, and how transparent most developed economies are.
However the first world and its mechanisms account for as much as 65% of the total amount of illegal money flows in the world, through its complex net of tax havens and the like.
There are many more things we can do in order to raise the amount the first world devotes to development. However it is our obligation to demand our political class to correct the apparent imperfections of a tax system that fails to address why there are still such things as tax havens and why countries compete in the basis of lower corporate taxes and taxes on royalties.
A world that does not tax its individuals correctly and proportionately is not a fair word. Only in a fair world shall we be able to compensate the lack of resources of a majority of the human kind.
Indeed an interesting piece.


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