The Responsible Globalist by Hassan Damluji

Author:Hassan Damluji
Language: eng
Format: epub
ISBN: 9780241355107
Publisher: Penguin Books Ltd
Published: 2019-09-04T16:00:00+00:00

Principle 5: The winners must pay to play

When two classes of citizens do not feel the taxes alike, they cease to have common interests and feelings in common … they have no opportunity and no desire to act in concert.

– Alexis de Tocqueville, The Old Regime and the Revolution, 1856

For too long, globalization has been explained as a process that inevitably moves people from poorer countries to richer countries, moves manual jobs from richer countries to poorer countries and decreases governments’ ability to control the economy – especially when it comes to taxing the ultra-mobile elite. No wonder large sections of the population, especially manual workers in rich countries, have come to see globalization as a threat rather than an opportunity. They see more competition for scarcer jobs in a rapidly changing community that no longer feels like home, while the people gaining most from the global economy contribute less and less, rather than sharing the proceeds of economic growth with people like them who have lost out.

Sadly, the favoured solution among those angered by this narrative is to strengthen the role of governments by undoing much of the global cooperation that seems to be constraining them. Pulling out of trade deals, ending immigration, leaving the European Union, reducing support for the United Nations – such retrograde steps have understandably become popular with people who long for a world in which their elected government is in total control, rather than, as seems the case, being at the mercy of global business and global institutions. But this would be to kill the goose that laid the golden egg, ending the unfairness of globalization by dismantling its very ability to create wealth.

For globalists to change this narrative, they need to demonstrate not only that the global economic system can create huge gains but also that those gains can be distributed fairly; not only that there will be many winners but also that there will be no major losers. That requires treating taxation – like the wealth which currently escapes it – as a global issue.

Globally coordinated taxation is needed to address a major challenge that simultaneously undermines faith in both global cooperation and nation-state governments: the emergence of a seemingly untouchable plutocratic elite. This alignment of interests makes tax an issue on which globalists can profitably focus their energies. Of course, closing tax loopholes may seem to be against the interests of the very wealthy, who are currently under-taxed. But they benefit more than anyone else from the global economic and political system and have the most to lose if it forfeits the public consent required to keep it in place. So, in truth, it is in everyone’s interest to take action.

Much progress can be made simply by fully implementing the existing reform agenda, primarily concerned with better information-sharing, which has been slowly advancing since the financial crisis in 2008.1 But we should raise the level of ambition by making concerted calls for the ubiquitous imposition of a minimum annual tax on all financial assets for those with a net worth above $1 million, set at perhaps 0.

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