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.