Luiza Nassif Pires’ Speech on Taxation and Social Justice at the G20

It is an honor to join this civil soci­ety ini­ti­a­ti­ve. Today, I will pre­sent the three recom­men­da­ti­ons that pro­po­se the “ove­rar­ching valu­es and gui­ding prin­ci­ples” for inter­na­ti­o­nal taxa­ti­on, accor­ding to the Civil Soci­ety Recom­men­da­ti­ons on Inter­na­ti­o­nal Taxa­ti­on for G20 Finan­ce Ministers.

The­se pro­po­sals aim to address some of the main chal­len­ges that G20 coun­tri­es cur­ren­tly face: the per­sis­tent ine­qua­li­ti­es – both betwe­en and within coun­tri­es – roo­ted in his­to­ri­cal injus­ti­ces mar­ked by colo­ni­a­lism, raci­al dis­cri­mi­na­ti­on, and gen­der dis­pa­ri­ti­es that are exa­cer­ba­ted by the dis­pro­por­ti­o­na­te bur­den of care work rele­ga­ted to women; issu­es that con­ti­nue to sha­pe access to resources.

We the­re­fo­re recom­mend the incor­po­ra­ti­on of human rights into tax policy for­mu­la­ti­on, the deco­lo­ni­za­ti­on of tax stan­dards, whi­ch depends on the deco­lo­ni­za­ti­on of tax policy deci­si­on-making pro­ces­ses, and the incor­po­ra­ti­on of an inter­sec­ti­o­nal appro­a­ch to taxa­ti­on in order to cor­rect the bia­ses of a sys­tem desig­ned to pro­tect and per­pe­tu­a­te whi­te privileges.

In recent years, we have seen a sig­ni­fi­cant incre­a­se in the impor­tan­ce given to the issue of ine­qua­li­ti­es and in the pro­duc­ti­on of evi­den­ce. Data from the World Ine­qua­lity Data­ba­se shows that, in 2022, the richest 1% of the popu­la­ti­on appro­pri­a­ted 20% of glo­bal inco­me, whi­le the bot­tom 50% appro­pri­a­ted only 8%.

The data expo­ses an even more shoc­king rea­lity when we look at wealth: the richest 1% of the world’s popu­la­ti­on holds 20 times more wealth than the enti­re poo­rest half of the world. In the last 25 years, the glo­bal wealth cap­tu­red by bil­li­o­nai­res has grown by 200% and the richest 1% have accu­mu­la­ted 38% of all wealth gene­ra­ted sin­ce 1995 (Chan­cel et al., 2022).

Given the regres­si­ve taxa­ti­on at the top of the dis­tri­bu­ti­on, a rea­lity even in the least une­qual coun­tri­es such as Fran­ce, this situ­a­ti­on con­ti­nu­es to wor­sen over time. Thus, we are not refer­ring here to a tre­men­dous and dis­tur­bing ine­qua­lity that is sta­ble; ins­te­ad, it grows ste­a­dily and, without some of the mea­su­res we pro­po­se, it will con­ti­nue to accelerate.

In the case of Bra­zil, emble­ma­tic for the depth and mul­ti­di­men­si­o­na­lity of its ine­qua­li­ti­es, the richest 0.1% — of whi­ch 69% are whi­te men — appro­pri­a­te as much inco­me as the poo­rest 34% — of whi­ch more than a third are black women. This means that the richest 132,000 Bra­zi­li­ans take home the same sha­re of GDP as the poo­rest 45 mil­li­on (data from the 2022 Con­ti­nu­ous PNAD and Bot­te­ga et al, 2021).

But Bra­zil’s une­qual dis­tri­bu­ti­on is not only expres­sed in inco­me and wealth. And even though the incre­a­se in ine­qua­lity rese­ar­ch and dis­se­mi­na­ti­on of data is urgent and wel­co­me, at times it leads to a bana­li­za­ti­on of its mea­ning and we lose sight of its mate­ri­al impli­ca­ti­ons. The­re­fo­re, I would like to quo­te Mãe Beth de Oxum, who makes ine­qua­lity very con­cre­te when she says that the “water that we lack in the periphery of Reci­fe is the water that is fil­ling the pools of the eli­te in the noble neigh­borho­od of Boa Via­gem.” And it is with this mate­ri­a­lity in mind, thin­king about the food that is left over on one side and who­se scar­city kills on the other side, that we need to dis­cuss this topic.

We need to dis­cuss this topic recal­ling that ine­qua­li­ti­es are expres­sed in vari­ous struc­tu­ral aspects. Glo­bally, it is reflec­ted in the dis­tri­bu­ti­on of resour­ces betwe­en North and South, betwe­en men and women, and among peo­ple of vari­ous eth­ni­ci­ti­es and races. We need to dis­cuss this topic con­si­de­ring the colo­ni­al and sla­very lega­ci­es that still mark our soci­ety and being mind­ful of the fact that, des­pi­te all injus­ti­ce, we still have an unfor­gi­va­ble dif­fi­culty in tal­king about repa­ra­ti­on. Thus, we need to bring nor­ma­ti­ve, ethi­cal, and moral issu­es to the cen­ter of eco­no­mic policy for­mu­la­ti­on. We need to be able to talk about soci­al justice. 

Pro­gres­si­ve taxa­ti­on is a fun­da­men­tal tool in this aspect sin­ce it plays a dual role. It both direc­tly affects the dis­tri­bu­ti­on of dis­po­sa­ble inco­me – ie. incre­a­ses in pro­gres­si­vity auto­ma­ti­cally trans­la­tes into redu­ced ine­qua­li­ti­es – as well as is the main ins­tru­ment for sta­te reve­nue col­lec­ti­on, ena­bling resour­ce mobi­li­za­ti­on and expan­ding the fis­cal spa­ce for the gua­ran­tee of human rights.

But des­pi­te its cen­tra­lity, the issue of human rights is often neglec­ted among eco­no­mists, and is igno­red in the design of rules for mana­ging public bud­gets (Ros­si et al, 2021).

Howe­ver, when we remem­ber the mate­ri­a­lity of ine­qua­li­ti­es, whi­ch mani­fests in the lack of access to basic sani­ta­ti­on, health, and edu­ca­ti­on for a sig­ni­fi­cant por­ti­on of the glo­bal popu­la­ti­on, in the lack of time for some women to enter the labor mar­ket, and in the lack of for­mal and decent jobs for a pre­ca­ri­ous, raci­ally and eth­ni­cally segre­ga­ted work­for­ce, it beco­mes cle­ar that we need to bring the issue of human rights and soci­al jus­ti­ce to the cen­ter of fis­cal policy discussions.

In other words, given the struc­tu­ral pro­blems I men­ti­o­ned, it is impe­ra­ti­ve that policy-makers main objec­ti­ve isn’t the public debt sta­bi­li­za­ti­on, but rather the expan­si­on of public invest­ment in urban infras­truc­tu­re, uni­ver­sal health, edu­ca­ti­on, and care sys­tems, as well as the strengthe­ning of employ­ment poli­ci­es. It is also neces­sary for fis­cal policy to be ori­en­ted towards cor­rec­ting and repai­ring his­to­ri­cal ine­qua­li­ti­es. And to be cle­ar: we are not tal­king about a debt of the past towards a part of the popu­la­ti­on that we have not paid off; we are tal­king about a debt that con­ti­nu­es to accu­mu­la­te and whi­ch size we can’’ cal­cu­la­te given the scar­city of disag­gre­ga­ted data.

In this sen­se, we, civil soci­ety, with the sup­port of aca­de­mia, beli­e­ve that an inter­na­ti­o­nal tax agre­e­ment needs to be made and, firs­tly, be gui­ded by human rights prin­ci­ples. Or, as we recom­mend in the docu­ment: the agre­e­ment must incor­po­ra­te human rights, socio envi­ron­men­tal and cli­ma­te obli­ga­ti­ons as ove­rar­ching prin­ci­ples to gui­de and inform tax decision-making

Secon­dly, we beli­e­ve it should be capa­ble of cre­a­ting par­ti­ci­pa­tory pro­ces­ses that bre­ak with dyna­mics that have his­to­ri­cally favo­red the North to the detri­ment of the South and, for this, we beli­e­ve it is essen­ti­al that the G20 fully sup­port and enga­ge cons­truc­ti­vely in the nego­ti­a­ti­on of a fair, ambi­ti­ous and pro­gres­si­ve Uni­ted Nati­ons Fra­mework Con­ven­ti­on on Inter­na­ti­o­nal Tax Cooperation.

Or, as we recom­mend in the docu­ment: the agre­e­ment should deco­lo­ni­ze stan­dards on taxa­ti­on by adop­ting cri­te­ria and mea­su­res whi­ch pro­mo­te equity betwe­en coun­tri­es, juris­dic­ti­ons and regi­ons, and com­pen­sa­te deve­lop­men­tal dif­fe­ren­ces and imba­lan­ces of the power 

Thir­dly, it is impe­ra­ti­ve that a tax agre­e­ment com­bats gen­der, race, and eth­ni­city dis­cri­mi­na­ti­ons impli­cit in our sup­po­se­dly neu­tral sys­tems. Or, as we recom­mend in the docu­ment: the agre­e­ment must incor­po­ra­te a gen­der and race/ethnicity appro­a­ch to tax poli­ci­es to fight gen­der and race/ethnicity inequalities.

 

Bibli­o­graphy

#1 Mãe Beth de Oxum | Desi­guais – novo pod­cast da revis­ta piauí. Entre­vis­ta­da: Mãe Beth de Oxum. Pre­sen­ter: Carol Pires. [S. I.]: Revis­ta Piauí, 15 mai. 2024. Pod­cast. Avai­la­ble at: https://www.youtube.com/watch?v=t6a_TnlrSZo Access: 28 mai. 2024.

Bot­te­ga, Ana; Bou­za, Isa­be­la; Car­do­min­go, Mati­as; Pires, Lui­za Nas­sif; Perei­ra, Fer­nan­da Peron. (2021) Quan­to fica com as mulhe­res negras? Uma aná­li­se da dis­tri­bui­ção de ren­da no Bra­sil (Nota de Polí­ti­ca Econô­mi­ca nº 018). MADE/USP

Chan­cel, L., Piketty, T., Saez, E., & Zuc­man, G. (Eds.). (2022). World Ine­qua­lity Ieport 2022. Har­vard Uni­ver­sity Press.

Civil Soci­ety Recom­men­da­ti­ons on Inter­na­ti­o­nal Taxa­ti­on for G20 Finan­ce Minis­ters. Bra­sí­lia, 23rd may 2024. Avai­la­ble at: https://inesc.org.br/wp-content/uploads/2024/05/g20-recommendations-on-international-taxation.pdf?x69356. Access: 28th may 2024.

Ros­si, Pedro; David, Gra­zi­el­le; Cha­par­ro, Ser­gio. Polí­ti­ca fis­cal e Direi­tos Huma­nos: rede­fi­nin­do res­pon­sa­bi­li­da­de fis­cal. Prin­cí­pi­os de Direi­tos Huma­nos na Polí­ti­ca Fis­cal, serie num­ber 3, may, 2021. Avai­la­ble at: derechosypoliticafiscal.org/es/recursos/documentos-complementarios-y-fuentes/79-documento-complementario-n-3-politica-fiscal-e-direitos-humanos-redefinindo-responsabilidade-fiscal.html. Access: 28th may 2024.