UN eyes taxes to raise $400B for development

The United Nations is proposing a set of taxes that could raise $400 billion every year for development. Photo by: 401K 2012 / CC BY-SA

The United Nations is eyeing a polemical move to bridge the shortfall in development finance: More taxes.

Experts have identified the potential of taxes to raise $400 billion every year for development in the annual report of the U.N. Department of Economic and Social Affairs. Among them:

  • Tax rich countries $25 per ton of carbon dioxide emissions.

  • Tax currency transactions (half of a basis point) on “all trading” involving the dollar, euro, yen and pound sterling.

  • Allocate a portion of the European Union’s proposed financial transaction tax for international climate finance.

  • Allocate a portion of the International Monetary Fund’s special drawing rights.

  • Tax billionaires 1 percent of their wealth.

The proposals mean well: scale up funding for development. Traditional donor funding has not been able to meet the needs of developing countries. In 2011, for instance, the development assistance shortfall increased to $167 billion, according Rob Vos, the report’s lead author.

But the proposed measures are likely to raise a lot of eyebrows. The European Union’s carbon emissions tax scheme has generated a lot of “uproar” from a number of international airlines. Further, Germany is the only EU nation that has “agreed” to share 15 percent of FTTs to international climate finance, according to the report.

But the United Nations may find a supporter in the billionaire’s tax. Billionaire Warren Buffett expressed support for the rich paying more taxes in an opinion piece for The New York Times last year. He said most of the mega-rich “wouldn’t mind being told to pay more in taxes.”

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About the author

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.