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Adam Baden, Tax Justice Network ■ Progressive Tax Measures to Realize Rights

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Progressive Tax Measures to Realize Rights

Like many others we are concerned governments’ policies should not deepen inequalities or negate many of our fundamental rights. In the wake of the 2008 financial crisis, many governments ran roughshod over their human rights obligations, insisting that such considerations could not be priortised in the context of such a calamity. This perverse logic had devastating impacts for many millions of people. Indeed it is precisely in the face of a global emergency that human rights norms and standards should be given the highest priority. The joint briefing from the Center for Economic and Social Rights (CESR) and Tax Justice Network (TJN) explains the the fiscal policy needed to respond adequately to COVID-19 and to narrow gaps between the advantaged and disadvantaged. The policy proposals outlined would be in line with international human rights law, which requires governments to mobilize the “maximum of available resources,” in a socially just manner, to realize everyone’s socioeconomic rights. 

Like many others we are concerned governments’ policies should not deepen inequalities or negate many of our fundamental rights. In the wake of the 2008 financial crisis, many governments ran roughshod over their human rights obligations, insisting that such considerations could not be priortised in the context of such a calamity. This perverse logic had devastating impacts for many millions of people. Indeed it is precisely in the face of a global emergency that human rights norms and standards should be given the highest priority.

The joint briefing from the Center for Economic and Social Rights (CESR) and Tax Justice Network (TJN) explains the the fiscal policy needed to respond adequately to COVID-19 and to narrow gaps between the advantaged and disadvantaged. The policy proposals outlined would be in line with international human rights law, which requires governments to mobilize the “maximum of available resources,” in a socially just manner, to realize everyone’s socioeconomic rights. 

The latest briefing on ‘Progressive Tax Measures to Realize Rights looks to find the right solutions we need to untangle ‘progressive’ rhetoric from ‘regressive’ policies. It’s important we establish which are the policies that will make a positive change to people’s lives. And which are the harmful ones which will fail you because, for example, of the country you live in, your race, or your gender. 

Most of the world’s governments have signed up to binding treaties that commit them to taking concrete steps to guarantee people’s rights and to remedy inequalities of all kinds using the maximum of their available resources. In line with this obligation, governments must raise money in a way that generates sufficient revenue to finance the infrastructure, goods and services needed to guarantee people’s rights. Taxation must also be progressive, socially equitable and based on the principle of ability to pay.

Key findings

  • Despite government intervention to provide economic relief and recovery, there is too little detail on what governments approach will be to ‘fiscal stimulus’.
  • The last 40 years governments have rolled back tax policies that oblige powerful corporations and wealthy individuals to pay their fair share.
  • How governments finance COVID-19 responses affects inequalities
  • Progressive taxation narrows gaps between the advantaged and the disadvantaged more directly

Key recommendations

  • Governments must seek innovative and progressive means to finance the large-scale social spending needed to protect lives and livelihoods in the wake of the COVID-19 pandemic including:
  • End over-reliance on “indirect” taxes like sales tax and VAT, which tend to take a bigger bite out of the income of poorer people and increase rates of “direct” taxes on high incomes and the most profitable businesses.
  • Governments should use the COVID-19 pandemic as an opening to find redistributive solutions for the medium
  • and long-term. 
  • Introduce or boost taxes on assets like property, wealth, inheritance and income from investments.
  • Crack down on tax evasion and avoidance by wealthy individuals and powerful corporations

Additional resources