A group of United Nations independent experts today called on the European Union (EU) to take the lead in promoting the adoption of a global financial transaction tax that would offset the costs of the current economic crisis and protect basic human rights.
“Where the world financial crisis has brought about the loss of millions of jobs, socialized private debt burdens and now risks causing significant human rights regressions through wide-ranging austerity packages, a financial transaction tax (FTT) is a pragmatic tool for providing the means for governments to protect and fulfil the human rights of their people,” said the Special Rapporteur on extreme poverty and human rights, Magdalena Sepúlveda.
According to a news release from the UN office of the High Commissioner of Human Rights (OHCHR), estimates suggest that at its lowest rate the FTT would yield about $48 billion across the Group of Twenty major economies, with higher rates offering up to $250 billion per year to offset the costs of the enduring economic, financial, fuel, climate and food crises.
The call from UN experts comes a day ahead of the Group of Eight Summit of industrialized countries, which will take place in Camp David in the United States.
“EU countries must take bold leadership now to pave the way towards what should eventually be a global FTT,” the UN experts urged, welcoming recent EU proposals to implement the financial transaction tax across the Eurozone.
Countries such as the Republic of Korea have implemented similar taxes in non-discriminatory ways to raise resources to achieve the right to development. The FTT, experts argue, would also help stabilize financial markets by discouraging speculation, and therefore mitigate the type of volatility which led to the 2008 financial and food crises.
“Food prices have twice spiked dangerously over the past five years, and could easily do so again,” stressed the Special Rapporteur on the right to food, Olivier De Schutter. “The FTT will likely reduce hot capital flows that fuel speculation, drive price instability and wreak havoc on the right to food worldwide.”
“A global FTT is not a silver bullet, but it would help relieve sovereign debt load stemming from the financial crisis, shift the burden from ordinary citizens to the private sector which caused the crisis, and significantly enlarge government fiscal space for spending on desperately needed economic and social rights programmes.” said the Special Rapporteur on foreign debt and human rights, Cephas Lumina.
The FTT would provide governments with an opportunity to act on their commitments to sustainable development and to take a step to advance development and include marginalized populations, said the Special Rapporteur on human rights and international solidarity, Virginia Dandan.
“When the financial sector fails to pay its share, the rest of society must pick up the bill,” Ms. Sepúlveda emphasized. “It is high-time that governments re-examine the basic redistributive role of taxation to ensure that wealthier individuals and the financial sector contribute their fair share of the tax burden.”