Chirac wants to raise your taxes
was the title of my September 21, 2004 post,
Jacques Chirac, arguably one of the most corrupt politicians of all time, yesterday gave a speech at the UN (that paragon of transparency) proposing to harness globalisation with a new “ethic for globalization”. The new ethic takes the form of a proposed $50 billion global tax on financial transactions, greenhouse gas emissions, arms sales, airline tickets and credit card purchases.
Back then Jacques reasoned,
“It is up to us to give globalisation a conscience,” he said. “There is no future in globalisation that tolerates predatory behaviour and the hoarding of its profits by a minority. There is no future in globalisation that destroys the social and economic balances, crushes the weak and denies human rights.”
Considering Jacques’s own financial history, I found it interesting that he’d bring up “predatory behaviour and the hoarding of its profits” at all, but I digress. The tax idea fell flat — even the French didn’t like it. Now Jacques is back with more of the same, but this time he wants the Tobin Tax to go towards AIDS relief, too, a cause Jacques hopes will make the tax more appealing.
Less grandiose measures, such as clean water, free trade, and lifting the ban on DDT would probably improve living conditions in poor countries faster and more efficiently than any tax.
EU Referendum comments
But then, if President Chirac really wanted to help the developing world, he and his country would not stand in the way of all attempts to make trade in agricultural goods free. Nor would France support every EU anti-dumping regulation. He would also support lifting all duty that is now placed in quite disproportionate degree on imports from developing countries.
The Economist realizes theineffectiveness of the Tobin Tax
. But in a hastily arranged speech delivered only hours earlier, Mr Chirac seemed to attempt to grab from Mr Blair (and Mr Brown) the intellectual lead on at least the second of those issues, by proposing new “international taxes or levies” to be used directly to finance development. For a start, he said, there should be an experimental levy to finance the fight against AIDS.
To what would this “international solidarity levy”—which Mr Chirac said could raise $10 billion a year—be applied? He had several suggestions: a very low rate of tax on international financial transactions, perhaps; a contribution by countries that maintain bank secrecy (hello, Switzerland) to compensate for the tax evasion they thereby facilitate; a tax on the use of fuel in transport by air or sea (which surely contributes to climate change); or even, say, a $1 levy on each of the 3 billion plane tickets sold each year worldwide.
This would not be, insisted Mr Chirac, that old French favourite, the “Tobin tax”, as proposed by the late Nobel prize-winning economist, James Tobin. But in the case of the levy on financial transactions, that is exactly what it would be. Such a tax has well-known disadvantages. It wrongly assumes that no cost would arise from the reduced liquidity in financial markets that would surely result. It also requires that all governments co-operate in levying the tax (unlikely, you might suppose); otherwise financial transactions would simply shift to non-co-operating countries.
Jacques made his speech via videolink. One wonders if he’ll get to meet Angelina, Sharon, and Bono after all that mental effort.