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Improving Domestic Resource Mobilization and Stemming Illicit Financial Flows

Improving Domestic Resource Mobilization and Stemming Illicit Financial Flows. Thomas Pogge. 1. World Poverty Today. Among 7.6 billion human beings, about 821 million are chronically undernourished ( SOFI Report 2018 , pp. v,xii,xiii,2,3),

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Improving Domestic Resource Mobilization and Stemming Illicit Financial Flows

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  1. Improving Domestic Resource Mobilization and Stemming Illicit Financial Flows Thomas Pogge 1

  2. World Poverty Today Among 7.6 billion human beings, about 821 million are chronically undernourished (SOFI Report 2018, pp. v,xii,xiii,2,3), >2000 million lack access to essential medicines (http://apps.who.int/medicinedocs/en/m/abstract/Js22176en/), 844 million lack safe drinking water (http://www.who.int/news-room/fact-sheets/detail/drinking-water), >1000 million lack adequate shelter (https://homelessworldcup.org/homelessness-statistics/), 1000 million lack electricity (https://www.iea.org/energyaccess/), 2600 million lack adequate sanitation (http://www.worldwatercouncil.org/en/water-supply-sanitation), 775 million adults are illiterate (http://uis.unesco.org/en/news/international-literacy-day-2017), 152 million children (aged 5 to 17) do wage work outside their household — oftenunder slavery-like and hazardous conditions: as soldiers, prostitutes or domestic servants, or in agriculture, construction, textile or carpet production (ILO: https://www.ilo.org/global/topics/child-labour/lang--en/index.htm). 2

  3. At Least a Third of Human Deaths — some 18 (out of 57) million per year or 50,000 daily — are due to poverty-related causes, in thousands: diarrhea (2163) and malnutrition (487), perinatal (3180) and maternal conditions (527), childhood diseases (847 — half measles), tuberculosis (1464), meningitis (340), hepatitis (159), malaria (889) and other tropical diseases (152), respiratory infections (4259 — mainly pneumonia), HIV/AIDS (2040), sexually transmitted diseases (128). WHO: World Health Organization, Global Burden of Disease: 2004 Update, Geneva 2008, Table A1, pp. 54-59.

  4. Poverty & Violence Deaths, Millions 4

  5. The Rosy Story As tracking of the Millennium & Sustainable Development Goals (MDGs/SDGs) shows, the situation of the world’s poor is steadily getting better and better. This diachronic perspective is systematically promoted by replacing the language of (human) rights with that of (development) goals. We are meant to accept that, so long as there is progress, all is well. 5

  6. The Seductive Goals Language Governments treat freedom from poverty as a goal to be meritoriously promoted at our leisure rather than as a human right to be implemented with no avoidable delay. 6

  7. So Which Comparison Matters Morally? The diachronic comparison with an earlier time (1830, 1990) – as suggested by the language of development goals? The synchronic comparison with what would be possible/avoidable today – as suggested by the language of human rights? Example slavery in 1850. The synchronic comparison focuses our attention on inequalityas key indicator for poverty avoidability. 7

  8. Reforming the Taxation ofMultinational Corporations Key problem: shifting profits into low-tax & no-tax jurisdictions. In 2016, US multinationals booked more profits in Ireland ($76.5 billion)than in China, Japan, Germany, France & Mexico combined ($76.4 billion). Other corporate tax havens: Netherlands ($43.3 billion), Switzerland ($40.9 billion), Singapore ($26.4 billion), Bermuda/Caribbean ($21.2 billion). Source: Wright & Zucman, “The Exorbitant Tax Privilege” (NBER working paper 2018); direct communications from Gabriel Zucman.

  9. Reforming the Taxation of Corporations Contemplated solutions: Improvements in the Arms-Length Principle; Unitary taxation with formulary apportionment (Sol Picciotto); Full deductibility of taxes paid in poor countries (Reuven Avi-Yonah); the requirement that, in their audited annual reports and tax returns, multinational corporations report their sales, profits, and taxes paid country by country for each jurisdiction in which they operate (Richard Murphy).

  10. Reforming the Taxation of Individuals Key problem: tax evasion by the very richest

  11. Reforming the Taxation of Individuals Contemplated solutions: requirement on financial institutions etc. to know beneficial owners of accounts & assets; abolition of shell companies and anonymous accounts; automatic exchange of tax information; global tax of 0.5% per annumon anonymous wealth (James Henry).

  12. General Structural Reforms Joint Tax Audits Between Developed and Developing Countries (Alt & Chilufya); International Convention on Financial Transparency (Harald Tollan); Creation of a World Tax Authority under UN auspices (Vito Tanzi).

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