UN calls for ‘billionaires tax’ to help world’s poor

UNITED NATIONS – The United Nations on Thursday, July 5 called for a tax on billionaires to help raise more than $400 billion a year for poor countries.

An annual lump sum payment by the super-rich is one of a host of measures including a tax on carbon dioxide emissions, currency exchanges or financial transactions proposed in a new report that accuses wealthy nations of breaking promises to step up aid for the less fortunate.

The UN’s annual World Economic and Social Survey also says it is critical to find new ways to help the world’s poor as pledged cash fails to flow.

The report estimates that the number of people around the globe worth at least $1 billion rose to 1,226 in 2012.

These include an estimated 425 billionaires in the United States, 315 in the Asia-Pacific region, 310 in Europe, 90 in other North and South American countries and 86 in Africa and the Middle East.

Together they own an estimated $4.6 trillion dollars — or an average of $3.75 billion per person, according to the report.

The UN estimates that a one percent tax on their wealth would raise $46 billion in 2012.

“Would this hurt them?” it questioned.

“The ‘average’ billionaire would own $3.7 billion after paying the tax. If that billionaire spent $1,000 per day, it would take him or her over 10,000 years to spend all his or her wealth,” the report says.

It says that the wealth of billionaires grew at an average rate of four percent a year in the two decades before the 2008-2009 financial crisis. “If that rate of growth returned with no wealth tax, the average billionaire’s wealth would double in less than 18 years.”

The UN acknowledged, however, that for now its tax on the unimaginably wealthy remains “an intriguing possibility.”

“It has not been regarded as a means of raising revenues for international cooperation.”

The report gives other ideas for international taxes, including:

— a tax of $25 per tonne on carbon dioxide emissions would raise about $250 billion. It could be collected by national governments, but allocated to international cooperation.

— a tax of 0.005 percent on all currency transactions in the dollar, yen, euro and pound sterling could raise $40 billion a year.

— taking a portion of a proposed European Union tax on financial transactions for international cooperation. The tax is expected to raise more than $70 billion (55 billion euros) a year.

It also suggests expanding a levy on air tickets that a number of nations already impose to raise money for drugs for poor states through UNITAID, a UN initiative.

The report says more than $1 billion has been handed over to UNITAID since the levy started in 2006.

France has a one euro tax for a domestic flight in economy and six euros for international flights — with 10 euros for business class on domestic flights and 40 euros on international tickets. The air industry fiercely opposes any extension of the tax, arguing that it already pays heavily in taxes and levies.

However, because of budget cuts, aid and development assistance to poor countries fell $167 billion short of promised levels in 2011, according to Rob Vos, the report’s lead author.

“We are suggesting various ways to tap resources through international mechanisms such as coordinated taxes on carbon emissions, air traffic and financial and currency transactions,” Vos said.

The UN expert said the taxes make “economic sense” as they stimulate the green economy and “mitigate financial market instability.”

“In short, such new financing mechanisms will help donor countries overcome their record of broken promises,” he added.

UN Secretary General Ban Ki-moon says that if the new “innovative financing” is to become viable, “strong international agreement is needed, with adequate governance mechanisms.” – Rappler.com