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Ideas for International Taxation
 
By Carl Teichrib (www.forcingchange.org)
 
NOTE: World tax schemes are being seriously considered in light of the global economic crisis. Recently, the United Nations published their 2011 Human Development Report which called for "social justice" among nations, and endorsed a global currency tax as one part of this agenda. Then, in the November 11, 2011 online edition of Emerging Markets it was revealed that the European Union is set to impose a continental Financial Transaction Tax (FTT) – originally known as the Tobin Tax – sometime near the end of 2012. And last month the tax was endorsed by Bill Gates and the Archbishop of Canterbury. Not surprisingly, the call for a world tax has been mouthed by Occupy Wall Street supporters. With all of this in mind, the following article provides important background regarding an international tax as a world government platform.
 
Parts of this article were published in 2000, updated in 2005, then recently revamped.
 
Further NOTE: This is my ridiculous attempt at advertising. The article you're going to read is important - it provides a "heads-up" and gives you context - in the hope that you will think through the ramifications, and not gullibly support something that may dismantle your liberty. But this level of research and writing doesn't come without ongoing costs. Therefore, please consider a membership with Forcing Change. When you purchase a membership, you're not joining an organization or a club. Rather, you're gaining access to all back-issues of Forcing Change, a selection of special reports, audio files, and more. You gain an education, and we can continue to do the research... so that you stay ahead of the game. While my advertising line may not be flashy, the point is clear: Your partnership with Forcing Change is vital.
 
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   Another hand is attempting to enter your wallet. If successful, this hand will take from "world citizens" and directly transfer the gains to the international community.
No, this is not a joke. Global taxation proposals are on the table, and have been for some time. Moreover, with each proposal a new step is taken to solidify this big idea, one especially intriguing to the United Nations.
 
   Presently the United Nations is chiefly funded through the contributions of member countries, which many UN advocates view as being restrictive to the growth of the world organization. In order to be freed from this monetary limitation, imposed by sovereign nations, it is believed that an alternative source of revenue is needed. Hoping to see a form of global taxation come into being, politicians from Canada, Belgium, France, England, Brazil, Uruguay, the United States and others,[1] have been working on supranational tax schemes since Canada codified the idea in 1999.
 
   But seeking optional funding for the United Nations goes back decades. Addressing the 1963 Harvard Alumni Association, UN Secretary-General U Thant related how a future United Nations "world police force" could only become a reality when the organization's economic hurdles are overcome.[2] Similarly, Richard Falk, an influential world-law attorney tied to the World Federalist Movement, recognized the importance of independent funding in his massive four volume series The Strategy of World Order, which was published in 1966 by the World Law Fund. In it Falk noted,
 
"If we conceive of life in a drastically altered international system with a large UN Police Force and a World Development Authority having a budget of up to 50 billion dollars per year, then the need to have assured sources of revenue is indeed significant." [3]
 
   Today, the larger goals of the United Nations far exceeds the 50 billion-dollars mark.
 
Creative Accounting
 
   Looking for ways to UN financial independence, the United Nations Economic and Social Council examined a multitude of money raising ideas in the 1990's, including the creation of a world lottery,[4] a UN credit card program,[5] and imposing "fines" for violating international law. [6]
 
   Surcharges and user-fees have also been suggested as viable funding options. In the 1995 report, Our Global Neighborhood, published by the UN sponsored Commission on Global Governance, a variety of user fee arrangements were listed:
 
-   Surcharges on airline tickets, including an extra charge for international flights.
-   Charges on ocean-going maritime traffic for use of international waterways.
-   Surcharges for non-coastal ocean fishing.
-   User fees for activities in Antarctica.
-   Parking fees for geo-stationary satellites.[7]
 
   In the year 2000 I had the opportunity of attending the United Nations Millennium Forum, where I was attached to the working group on Strengthening and Democratizing the United Nations. Here I heard about a novel idea: creating a UN Security Insurance Agency. This plan, it was explained, would allow small countries that lack significant military forces to pay insurance premiums to the United Nations. In turn, the UN would guarantee the security of the insured country by mobilizing armed units against anyone who threatened it.[8] Hence, the UN would be empowered in two special ways,
 
1.     Revenue is generated into the world body.
2.     The UN is granted the power to mobilize and command its own international military force.
 
   But of all the proposals that have circulated over the decades, world taxation schemes have received the most attention. To this end, the earlier-mentioned Commission on Global Governance suggested a number of taxation models, including a "carbon tax" based on emissions, and a corporate levy on multinational companies.[9] While the Commission recognized that taxes are "never politically popular at the best of times," it acknowledged one particular plan over all others: an arrangement now officially accepted, at least in principle, by America's largest trading partner.
 
The Tobin Scheme
 
   In 1978, U.S. economist James Tobin published his thoughts on global monetary reform in the Eastern Economic Journal. His concept, now known as the "Tobin tax," called for a universally accepted charge on foreign currency transactions [NOTE: Tobin supported the idea of a single global currency, but viewed this as impracticable in the short term]. Considering the trillions of dollars traded each year (one estimate is US $1.2 trillion/day[10]), the fund raising potential is staggering. And, as a selling point to national governments, the concept is being touted as a way of clipping the wings of "rogue" currency traders.[11] In fact, the Tobin tax has been so well received in certain policy circles that in 1999 the Canadian federal government officially endorsed the plan, giving the tax scheme legal legitimacy. [NOTE: The current Conservative government in Ottawa opposes the Tobin Tax, now often referred to as a "Robin Hood" tax and aimed at the banking industry].
 
   On October 28, 1998, Lorne Nystrom (NDP), a Member of Parliament from the province of Saskatchewan, introduced the Tobin tax to the Canadian House of Commons. Describing the levy as "a feasible part of a new world order and new world vision,"[12] Nystrom elaborated on how large the coffers would have been if the tax had been implemented based on 1995 foreign currency transactions. In his speech to the House, the intent of the hoped-to-be imposed tax was clearly explained.
 
"If there were a 0.1% Tobin tax on foreign currency transactions, that would raise, in 1995 dollars, $176 billion U.S. That is a lot of money. A Tobin tax of 0.003% would be enough money to fund the United Nations peacekeeping around the world…One of the consequences would be the establishment of a global village which would have a common good amongst all nations of the world. There would be a strengthening of international organizations. The United Nations would become a meaningful world government and would share things with national governments around the world. There could be permanent international peacekeeping forces. There are many things that could be done." [13]
 
   Nystrom further clarified that the International Monetary Fund or the World Bank could be reformed to implement this plan, although he preferred "a new international financial agency to administer the Tobin tax."[144] According to Mr. Nystrom, the world would be a better place if we had a global IRS.
 
   While some members of parliament did voice opposition to the tax proposal, it received broad political support across party lines. On March 23, 1999, the Canadian Parliament passed the Tobin tax with a vote of 164 to 83. At this time the tax is simply "on the books," with the understanding that when the international community fully accepts it, Canada will already be in the loop.
 
   Considering that Canada is America's largest trading partner, with two-way commercial trade running in excess of $500 billion in 2005, the Tobin tax decision has potential consequences for more than just lining UN pockets. If and when the tax comes into effect, such a scheme will impact the price of trans-border goods and services. And your wallet will be just a little lighter.
 
   Within the United States, the Tobin Tax has been slow to catch on, but it has made a small introduction into the federal political system. In the year 2000, Congressmen Peter DeFazio (D-OR) and Senator Paul Wellstone (D-MN) urged the US government to enact the global levy. Certain special interest groups have also joined the cause. The California-based Center for Environmental Economic Development has established the "Tobin Tax Initiative."[15] And the World Federalist Association (now known as Citizens for Global Solutions), America's largest world government lobby group, is helping add acceptance pressure.
 
   International non-governmental organizations, special interest groups who carry global influence, are also supportive. The World Federalist Movement (WFM), which is the umbrella organization under which the WFA operates, has been advancing the principles of the Tobin tax. Its executive officer, Bill Pace, played a critical role during the UN Millennium Forum (May 22-26, 2000), and here too the Tobin tax took a high priority, especially in the working group I attended. During the final day of the Forum, international attorney Richard Falk – through the invitation of Bill Pace – held a special meeting regarding specific global governance proposals. As I looked around the room, I wasn't surprised to see that many in this meeting had given vocal support to the Tobin tax earlier in the week. An obvious strategic linkage existed between world taxation and the creation of a world management structure.
 
Taxing Problems
 
   While great strides have been made to advance world taxation, major implementation problems exist. The tax would have to be universally accepted; otherwise, non-participating nations would quickly become tax havens. With this in mind, what enforcement options would be used for non-compliant countries? Who would ultimately collect the tax and oversee its use? How would a global tax affect national and regional economies? And what safeguards would be employed to restrain corruption, or to keep the levy from continually rising?
 
   Initially, problems surrounding design and management of the tax may seem insoluble. However, the fact remains that we now have an increasingly harmonized global tariffs arrangement, which at one time was considered as utopian as the presently discussed international tax. Major organizations and influential individuals within the world community are not asking "if" or "when," but rather "what will it take?"
 
   Beyond the predictable complications associated with implementing a world tax, a greater danger exists in what such a taxation regime represents. In the third volume of Richard Falk's Strategy of World Order, Norman J. Padelford, an early advocate of United Nations monetary reform, gave a warning regarding autonomous UN funding.
 
"The power of an independent purse could become the prelude to the seizing and exercising of independent power. This could be detrimental to national independence and even ultimately to personal freedom." [16]
 
   This danger struck home while I was attending a youth-oriented world government conference in Washington, DC – an event sponsored by the World Federalist Association.[17] One of the panelists, a young lady from the US, rigorously pressed the need for a world management system equipped with the power to tax,
 
"On the international level, graduated tax must be implemented… Presently, Americans accept mandatory taxes on a state and national level. A successful world government rides on applying this system internationally. Aside from economic sacrifices, effective [world] government entails the sacrifice of certain freedoms. In cultivating security through a globally respected law enforcement system, all nations, and therefore all people must cooperate and make some sacrifices… A world government must establish an equilibrium where certain freedoms are restricted in mankind's best interest… global law transcends national law, and unity carries more weight than diversity. This requires each nation state to yield certain rights to the international government, vowing to abide by international decisions." [18]
 
Funding Global Governance
 
   It has often been said that the dividends derived from alternative United Nations funding programs, like the Tobin tax, would go towards making the world a more secure place. UN Secretary General U Thant inferred this during his 1963 Harvard speech, and the 1999 legislative action of the Canadian government also demonstrated this taxation/world police and security link.
 
   The fact that numerous plans exist to develop an international police and military force, either under the direct umbrella of the United Nation or somehow else attached to the UN's decision making process, gives us a window into the importance of alternative funding. As the UN currently stands, it doesn't have the economic means to field a functional battle group. Hence, if the dreams of global security under UN auspices are to be realized, funding issues will have to be addressed and implemented.
 
   1n 1999, Canada, during Jean Chretien's administration and through the prompting of a New Democratic member of parliament, became the first to adopt the Tobin tax. Other government entities have started to follow. The year after Canada adopted the Tobin scheme, the European Parliament started to seriously take interest in the plan. And in 2003, Belgium tabled a similar global tax platform. Other countries are contemplating similar steps.
 
   If a world tax were to become a reality, for the sake of global security or for another reason, it would elevate the United Nations to the level of a sovereign regime. As A.W. Clausen, former President of the BankAmerica Corporation and the World Bank said in 1979, "The control of money and credit strikes at the very heart of national sovereignty."[19]
  
   Indeed it does. The control of money and credit, two aspects that dovetail a world tax regime, empowers the end-user with sovereign economic leverage. Therefore, if the United Nations possesses taxing authority either through participating member countries or via another circuit, the world body could conceivably be magnified to that of a semi-autonomous ruling entity. After all, the ability to create wealth out of taxation is the power and prerogative of government, and that's essentially what the United Nations would become. --
 
Carl Teichrib is editor of Forcing Change, a monthly journal documenting world change issues (www.forcingchange.org).
 
Endnotes:

[1] For more information on which countries and politicians have been working on this idea, see the two links listed: http://tobintaxcall.free.fr/list.htm, and http://tobintaxcall.free.fr/in%20the%20parliaments.htm. Also see the Open Letter titled "The Tobin Tax at the ECOFIN."
[2] U Thant, "United Nations Peace Force," an address to the Harvard Alumni Association, Cambridge, Massachusetts, June 13, 1963. As re-printed in The Strategy of World Order, Volume III: The United Nations (World Law Fund, 1966), pp.526-534.
[3] Richard Falk and Saul H. Mendlovitz, The Strategy of World Order, Volume III: The United Nations (World Law Fund, 1966), p.731.
[4] United Nations Economic and Social Council, Debate on New & Innovative Ideas for Funds, July 23-24, 1997. UN Press Release.
[5] Ibid.
[6] James A. Paul, Statement on Innovative Funding to the UN Economic and Social Council, July 11, 1996.
[7] The Commission on Global Governance, Our Global Neighborhood (Oxford University Press, 1995), pp.220-221.
[8] James A. Paul, Alternative Financing for Global Peace and Development (Global Policy Forum, September, 1997).
[9] Ibid., pp.218-221.
[10] See, Currency Transaction Tax – Question and Answers, www.currencytax.org/questions_and_answers.php
[11] See Paul Hellyer's book Stop: Think (Chimo Media, 1999), p.176.
[12] Hon. Lorne Nystrom, "Tax on Financial Transactions," Private Members Business, Edited Hansard – Number 144, Wednesday, October 28, 1998, Canadian Federal Government House of Commons, p.1735.
[13] Ibid., p.1745.
[14] Ibid.
[15] The Tobin Tax website for the Center for Environmental Economic Development is http://ceedweb.org/iirp.
[16] Norman J. Padelford, "Financial Crisis and the Future of the United Nations," The Strategy of World Order, p.768.
[17] This conference, sponsored by the World Federalist Association and the Center for Global Peace, was titled the "National Youth Conference on the Hague Appeal for Peace." The dates were April 9-11, 1999, and took place in the Ward Building at the American University.
[18] I am not going to publish the name of this youth participant because of her age at the time of the meeting.
[19] From an interview between Michael Loyd Chadwick and A.W. Clausen; as published in the 1981 Freemen Digest issue on International Banking, p.21.