I spoke at the United Nations back in May, explaining that more government was the wrong way to help the global economy.
But I guess I’m not very persuasive. The bureaucrats have just released a new report entitled, “In Search of New Development Finance.”
As you can probably guess, what they’re really searching for is more money for global redistribution.
But here’s the most worrisome part of their proposal. They want the U.N. to be in charge of collecting the taxes, sort of a permanent international bureaucracy entitlement.
I’ve written before about the U.N.’s desire for tax authority (on more than one occasion), but this new report is noteworthy for the size and scope of taxes that have been proposed.
Here’s the wish list of potential global taxes, pulled from page vi of the preface.
Here’s some of what the report had to say about a few of the various tax options. We’ll start with the carbon tax, which I recently explained was a bad idea if imposed inside the U.S. by politicians in Washington. It’s a horrible idea if imposed globally by the kleptocrats at the United Nations.
…a tax of $25 per ton of CO2 emitted by developed countries is expected to raise $250 billion per year in global tax revenues. Such a tax would be in addition to taxes already imposed at the national level, as many Governments (of developing as well as developed countries) already tax carbon emissions, in some cases explicitly, and in other cases, indirectly through taxes on specific fuels.
Notice that the tax would apply only to “developed countries,” so this scheme is best characterized as discriminatory taxation. If Obama is genuinely worried about jobs being “outsourced” to nations such as China (as he implies in his recent attack on Romney), then he should announce his strong opposition to this potential tax.
But don’t hold your breath waiting for that to happen.
Next, here’s what the U.N. says about a financial transactions tax.
A small tax of half a “basis point” (0.005 per cent) on all trading in the four major currencies (the dollar, euro, yen and pound sterling) might yield an estimated $40 billion per year. …even a low tax rate would limit high-frequency trading to some extent. It would thus result in the earning of a “double dividend” by helping reduce currency volatility and raising revenue for development. While a higher rate would limit trading to a greater extent, this might be at the expense of revenue.
This is an issue that already has attracted my attention, and I also mentioned that it was a topic in my meeting with the E.U.’s Tax Commissioner.
But rather than reiterate some of my concerns about taxing financial consumers, I want to give a back-handed compliment the United Nations. The bureaucrats, by writing that “a higher rate…might be at the expense of revenue,” deserve credit for openly acknowledging the Laffer Curve.
By the way, this is an issue where both the United States and Canada have basically been on the right side, though the Obama Administration blows hot and cold on the topic.
Now let’s turn to the worst idea in the U.N. report. The clowns want to steal wealth from rich people. But even more remarkable, they want us to think this won’t have any negative economic impact.
…the least distorting, most fair and most efficient tax is a “lump sum” payment, such as a levy on the accumulated wealth of the world’s richest individuals (assuming the wealthy could not evade the tax). In particular, it is estimated that in early 2012, there were 1,226 individuals in the world worth $1 billion or more, 425 of whom lived in the United States, 90 in other countries of the Americas, 315 in the Asia-Pacific region, 310 in Europe and 86 in Africa and the Middle East. Together, they owned $4.6 trillion in assets, for an average of $3.75 billion in wealth per person.21 A 1 per cent tax on the wealth of these individuals would raise $46 billion in 2012.
I’ll be the first to admit that you can’t change people’s incentives to produce in the past. So if you steal wealth accumulated as the result of a lifetime of work, that kind of “lump sum” tax isn’t very “distorting.”
But here’s a news flash for the nitwits at the United Nations. Rich people aren’t stupid (or at least their financial advisers aren’t stupid). So you might be able to engage in a one-time act of plunder, but it is deliberate naiveté to think that this would be a successful long-run source of revenue.
For more information, I addressed wealth taxes in this post, and the argument I was making applies to a global wealth tax just as much as it applies to a national wealth tax.
Now let’s conclude with a very important warning. Some people doubtlessly will dismiss the U.N. report as a preposterous wish list. In part, they’re right. There is virtually no likelihood of these bad policies getting implemented at any point in the near future.
But the statists have been relentless in their push for global taxation, and I’m worried they eventually will find a way to impose the first global tax. And if you’ll forgive me for going overboard on metaphors, once the camel’s nose is under the tent, it’s just a matter of time before the floodgates open.
The greatest threat is the World Health Organization’s scheme for a global tobacco tax. I wrote about this issue back in May, and it seems my concerns were very warranted. The bureaucrats recently unveiled a proposal – to be discussed at a conference in South Korea in November – that would look at schemes to harmonize tobacco taxes and/or impose global taxes.
Here’s some of what the Washington Free Beacon wrote.
The World Health Organization (WHO) is considering a global excise tax of up to 70 percent on cigarettes at an upcoming November conference, raising concerns among free market tax policy analysts about fiscal sovereignty and bureaucratic mission creep. In draft guidelines published this September, the WHO Framework Convention on Tobacco Control indicated it may put a cigarette tax on the table at its November conference in Seoul, Korea. …it is considering two proposals on cigarette taxes to present to member countries. The first would be an excise tax of up to 70 percent. …The second proposal is a tiered earmark on packs of cigarettes: 5 cents for high-income countries, 3 cents for middle-income countries, and 1 cent for low-income countries. WHO has estimated that such a tax in 43 selected high-/middle-/low-income countries would generate $5.46 billion in tax revenue. …Whichever option the WHO ends up backing, “they’re both two big, bad ideas,” said Daniel Mitchell, a senior tax policy fellow at the Cato Institute. …Critics also argue such a tax increase will not generate more revenue, but push more sales to the black market and counterfeit cigarette producers. “It’s already huge problem,” Mitchell said. “In many countries, a substantial share of cigarettes are black market or counterfeit. They put it in a Marlboro packet, but it’s not a Marlboro cigarette. Obviously it’s a big thing for organized crime.” …The other concern is mission creep. Tobacco, Mitchell says, is easy to vilify, making it an attractive beachhead from which to launch future vice tax initiatives.
It’s my final comment that has me most worried. The politicians and bureaucrats are going after tobacco because it’s low-hanging fruit. They may not even care that their schemes will boost organized crime and may not raise much revenue.
They’re more concerned about establishing a precedent that international bureaucracies can impose global taxes.
I wrote the other day about whether Americans should escape to Canada, Australia, Chile, or some other nation when the entitlement crisis causes a Greek-style fiscal collapse.
But if the statists get the power to impose global taxes, then what choice will we have?
[…] You won’t be surprised to learn that a branch of the United Nations is pushing for global taxation of tobacco. To paraphrase Douglas McArthur, “Bad ideas never die, they become […]
[…] You won’t be surprised to learn that a branch of the United Nations is pushing for global taxation of tobacco. To paraphrase Douglas McArthur, “Bad ideas never die, they become […]
[…] written over the years about various U.N. proposals for global taxes on financial transactions, energy, wealth, tobacco, air travel, and the […]
[…] Amen. Now let’s see if Republicans put our money where their mouths are and defund pro-tax international bureaucracies such as the Organization for Economic Cooperation and Development. […]
[…] the United Nations admitting that the Laffer Curve limits the feasible amount of taxes that can be […]
[…] Another Push for Global Taxation from the United Nations https://danieljmitchell.wordpress.com/2012/09/28/another-push-for-global-taxation-from-the-united-nat… […]
[…] the United Nations admitting that the Laffer Curve limits the feasible amount of taxes that can be […]
[…] the United Nations admitting that the Laffer Curve limits the feasible amount of taxes that can be […]
[…] You won’t be surprised to learn that a branch of the United Nations is pushing for global taxation of tobacco. To paraphrase Douglas McArthur, “Bad ideas never die, they become […]
[…] You won’t be surprised to learn that a branch of the United Nations is pushing for global taxation of tobacco. To paraphrase Douglas McArthur, “Bad ideas never die, they become […]
[…] like the United Nations acknowledged the Laffer-Curve insight that taxes can be too […]
[…] You won’t be surprised to learn that a branch of the United Nations is pushing for global taxation of tobacco. To paraphrase Douglas McArthur, “Bad ideas never die, they become […]
[…] the United Nations admitting that the Laffer Curve limits the feasible amount of taxes that can be […]
[…] bits of rationality from the World Bank (on government spending), IMF (on the Laffer Curve), or United Nations (also on the Laffer Curve) justify subsidies to those […]
[…] which pushes a plethora of bad policies, including a push for regulatory control over the Internet, support for global taxation, supranational gun control schemes, attacks on sovereignty of American states, and support for a […]
[…] You won’t be surprised to learn that a branch of the United Nations is pushing for global taxation of tobacco. To paraphrase Douglas McArthur, “Bad ideas never die, they become […]
[…] the United Nations admitting that the Laffer Curve limits the feasible amount of taxes that can be […]
[…] Global taxation with no democratic accountability or oversight. […]
[…] Global taxation with no democratic accountability or oversight. […]
[…] Global taxation with no democratic accountability or oversight. […]
[…] Global taxation with no democratic accountability or oversight. […]
[…] If you want to learn more about the underlying issue, I wrote about the WHO’s push for global tobacco taxation back in both May and September. […]
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Seems to me, in answer to Tommy Knowlton, that the UN has no authority to impose these taxes on any nation whatsoever; rather, the UN is more like the Confederation Congress under Articles of Confederation, somewhat, in that they have the ability to recommend taxes or request them, but it is up to each participating nation to go and impose them and collect them. And we all know how well that system worked out under the Articles. Congress alone has the authority to impose taxes upon the American people, and no one else. Congress cannot make a treaty that delegates that authority to another nation or to a conglomerate of nations like the UN, because this would in effect violate the Constitution, namely Article I Section 8, giving Congress and Congress alone the authority levy taxes. And the reason this was done this way, in that Congress alone has the authority to levy taxes, Congress being our representative body, was because we had a little tiff with the Brits back when we were a colony about no taxation without representation in Parliament. And if the UN started demanding taxes from any nation, let alone the U.S., all we’d have to do is pull the sovereignty card and thumb our nose at the UN, because they have no such authority. And if any U.S. presidential admin. tried to impose these taxes on the U.S., the courts would rule it unconstitutional. Thus, it would take a constitutional amendment to allow the UN to levy such taxes on the U.S. and have them be authoritative; or Congress would have to levy them on the U.S. and then give the money to the UN, which I personally view as unconstitutional, as I do all foreign aid and money sent to other nations, but others would argue that such an ability falls under the “General Welfare Clause…” although we all know how preposterous that sounds!
Yes, retroactive taxes cannot affect past incentives to create prosperity, however, retroactive taxes are one of the most effective ways to break trust in society and the rule of law for generations to come. Not only for billionaires, but for most of the inhabitants of this world who may engage in above-par productivity. Because, if retroactive taxes are ok on billionaires then it is just a small step before they start being applied downwards — until they reach the middle class, like other taxes (VAT, Carbon, real estate tax etc.).
But even if the UN billionaire tax, — *starting* for now at 1% and *initially* only applied to billionaires (dream on…)– stays on billionaires only but eliminates a single one of those future, to be, 1200 billionaires, then the tax will have still had a negative overall effect. (Though I understand that you may not think so if what you envision is crony statist capitalism where wealth often correlates with corruption – hence the vicious cycle, but that is another story…)
Now if humanity votes on these taxes, good luck to the one third of a billion Americans overcoming the six billion worldwide vote. But my hunch is that, Americans, while they still maintain their sovereignty, will vote “Hands off our billionaires’ money! It is reserved for our own HopNChange plans – you know, to distribute to the occupy protesters who are still in the top twenty percent of wealth by worldwide standards”. Another approach would, of course, be to have the occupy protesters put their money where their mouth is and trim their fat (by world standards) wallets to support some UN bureaucracy that will keep twenty percent, waste fifty percent, and redistribute the remaining third worldwide.
The ultimate nightmare!
An idea so bad it could only come from an unelected bureaucrat drawing a tax free salary. No doubt they’d also figure out how to exempt themselves from new taxes
Could somebody ‘splain to me, what authority does the UN have to impose any taxes at all? Certainly it’s an at-will organization, and so member nations might be required to pay to play. But that’s not the kind of situation called to mind by the word “tax”.