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	Only an economic revolution can defuse the global inequality timebomb by Nicholas Lusiani, Helen Dennis, Jacques Leslie Poverty Matters & agencies   15 May, 2014   Economist Thomas Piketty warns that unless action is taken to redistribute wealth, inequality will widen until it becomes unsustainable. Development goal-setters ignore him at their peril.   The focus on global inequality has gone mainstream. From papal proclamations to warnings of impending doom by the economist Thomas Piketty, social injustice is making headlines. Yet the issue is still not being considered seriously enough in the byzantine process of setting new development goals: the spotlight has remained on economic growth.   Tackling economic inequality is not easy, but as Piketty and others have stressed, ignoring it could create a timebomb, not least because it limits a country"s ability to uphold human rights.   An ambitious, post-2015 fiscal revolution is needed to address key questions at the heart of sustainable development: how to raise enough resources; how to ensure those resources are used to tackle inequality and ensure no one is left behind; and how to provide transparency and accountability over public policy.   The question of who pays for all this is a political hot potato. The cost of delivering new sustainable development goals (SDGs), including climate change commitments, will be about $1tn per year.   The millennium development goals (MDGs) have been underfunded to the tune of $120bn, and with the SDGs we are talking about a much more ambitious programme.   Despite the financial crisis, the world has never been richer. The challenge is to use this wealth better, but a new approach is vital. That is why ideas such as a sustainable development solidarity capital tax, based on Piketty"s proposal for Europe, should be considered.   The French economist suggests a 1% tax on all property and financial assets worth €1m-€5m, and 2% on capital above that. As with financial transaction taxes, there are practical questions about whether a sustainable development solidarity capital tax should be levied and spent domestically, or to what extent it should go into a global pot. These are questions the committee of experts on sustainable development financing should explore at its meeting in New York this week. All options, including those that may seem politically difficult, must be considered.   Fiscal measures such as this, and proposals to tackle illicit financial flows, offer the greatest hope of raising enough cash to pay for the SDGs. But raising money is not enough. The human rights principle of equality demands that we also attend to the impact of how resources are found and spent.   In many countries, regressive tax systems – which are heavily reliant on goods and services taxes, often at the expense of more progressive income and wealth taxes – have disproportionately burdened poor people. They have also fuelled rising income and wealth inequality.   Full transparency and meaningful public participation is required in domestic and global fiscal policymaking. Yet there is a long way to go before the conditions for accountable fiscal governance are in place worldwide. The new sustainable development framework must address accountability gaps at the international level.   It should include firm and monitorable pledges by powerful countries and international financial institutions to tackle tax evasion and other illicit financial flows. It should also ensure that tax policies in poor countries do not undermine their ability to meet human rights and sustainable development commitments.   The new SDGs could include targets to reduce economic inequality through enhanced use of progressive taxation on income and wealth. Indicators could track progress towards ending cross-border tax evasion, returning stolen assets, forgiving odious debt and progressively combating tax abuses.   Human rights and development advocates will also be watching to see whether member states involved in the financing conversation are brave enough to promote the fiscal revolution that will be vital for achieving post-2015 goals.   Nearly every review of Piketty"s book has stressed how unrealistic his recommendations are. But a "mansion tax" in the UK is now a mainstream proposal, and a financial transactions tax – until recently dismissed as impractical – is poised to be implemented across Europe.   The SDGs are likely to take 2030 as their end date, and a lot can change in that time. This is no time for low ambitions. Given the magnitude of today"s sustainable development challenges, and the mandate for transformative change that human rights provide, the international community should embrace proposals that think big and think ahead.   * Nicholas Lusiani is senior researcher at the Centre for Economic and Social Rights. Helen Dennis is senior adviser on poverty and inequality at Christian Aid.   http://www.cesr.org/downloads/fiscal.revolution.pdf http://www.christianaid.org.uk/images/Africa-tax-and-inequality-report-Feb2014.pdf   The True Cost of Hidden Money, by Jacques Leslie. (NYT)   Gabriel Zucman is a French economist who decided to solve a puzzle: Why do international balance sheets each year show more liabilities than assets, as if the world is in debt to itself?   Over the last couple of decades, the few international economists who have addressed this question have offered a simple explanation: tax evasion. Money that, say, leaves the United States for an offshore tax shelter is recorded as a liability here, but it is listed nowhere as an asset — its mission, after all, is disappearance.   But until now the economists lacked hard numbers to confirm their suspicions. By analyzing data released in recent years by central banks in Switzerland and Luxembourg on foreigners’ bank holdings, then extrapolating to other tax havens, Mr. Zucman has put creditable numbers on tax evasion, showing that it’s rampant — and a major driver of wealth inequality.   Mr. Zucman estimates — conservatively, in his view — that $7.6 trillion — 8 percent of the world’s personal financial wealth — is stashed in tax havens. If all of this illegally hidden money were properly recorded and taxed, global tax revenues would grow by more than $200 billion a year, he believes. And these numbers do not include much larger corporate tax avoidance, which usually follows the letter but hardly the spirit of the law.   According to Mr. Zucman’s calculations, 20 percent of all corporate profits in the United States are shifted offshore, and tax avoidance deprives the government of a third of corporate tax revenues. Corporate tax avoidance has become so widespread that from the late 1980s until now, the effective corporate tax rate in the United States has dropped from 30 percent to 15 percent, Mr. Zucman found, even though the tax rate hasn’t changed.   Mr. Zucman, an assistant economics professor at the London School of Economics, is part of a wave of data-focused economists led by Thomas Piketty, of the Paris School of Economics. Mr. Zucman’s short book on tax evasion, “The Missing Wealth of Nations,” was a best seller in France last year.   Mr. Zucman’s tax evasion numbers are big enough to upend common assumptions, like the notion that China has become the world’s “owner” while Europe and America have become large debtors. The idea of the rich world’s indebtedness is “an illusion caused by tax havens,” Mr. Zucman wrote in a paper published last year. In fact, if offshore assets were properly measured, Europe would be a net creditor, and American indebtedness would fall from 18 percent of gross domestic product to 9 percent.   Only multinational corporations and people with at least $50 million in financial assets usually have the resources to engage in offshore tax evasion. Since the less wealthy continue paying taxes, the practice deepens wealth inequality.   Newly invigorated efforts in the United States to curb personal tax evasion, codified in the 2010 Foreign Account Tax Compliance Act, have armed the Internal Revenue Service with strong sanctions to levy on foreign banks that fail to disclose accounts held by American residents. This has made it “more difficult for moderately wealthy individuals to dodge taxes,” Mr. Zucman says, while the richest account holders still have more elaborate evasive techniques at their disposal.   “There’s a profound shift in attitudes that happened in the 1980s,” Mr. Zucman says. “In the ’50s, ’60s and ’70s, taxes were much higher, yet it was not considered normal to try to aggressively minimize your tax bill and even to evade taxes.” He finds it “no coincidence” that the era of widespread tax evasion began in the Reagan era, with the rise of the idea that government is a beast that must be starved.   Because large-scale tax evasion skews key economics statistics, it hampers officials’ ability to manage the economy or make policy, Mr. Zucman says. It erodes respect for the law, preventing the government from carrying out one of its essential tasks. And it discourages job creation, since it rewards people and corporations for keeping money overseas, instead of investing it domestically.   Despite the obstacles that the tax compliance act faces, Mr. Zucman believes its passage marked a global turning point, starting an era of “progress” in reducing bank secrecy. Even so, only an international approach has a chance of stopping tax evasion, he says. Its most important feature would be a global financial registry, which would track wealth ownership. “If you can’t measure wealth,” Mr. Zucman says, “it’s almost impossible to tax it.”   A registry would make it impossible for multinationals to falsely attribute profits to tax havens instead of the countries where the profits should be taxed. The United States and Europe could build momentum for a global registry by establishing national registries for their own residents.   What’s beyond question is that there is no economic, political or moral justification for tax evasion — it exists only because of the political influence that wealth buys. A society that fails to fight widespread tax evasion proclaims its own corruption. Visit the related web page
	Pressing Your Case: Nonviolent Movements and the Media by International Center on Nonviolent Conflict   Organizers and strategists of nonviolent movements often struggle in dealing with the mainstream news media. Some consider it their enemy, because coverage can be patchy or inaccurate. Others unrealistically expect the media to advocate for their causes.   Yet few resources for activists have provided a reliable explanation of how an effective relationship between a movement and the media might look, and how movement participants can best approach the mainstream media in order to generate interest.   The International Center on Nonviolent Conflict (ICNC) has helped develop “Pressing Your Case: Nonviolent Movements and the Media,” an educational video series to explore ways that nonviolent campaigns and movements can better relate to world media.   It features four sessions, hosted by internationally known news anchor Riz Khan, in collaboration with Howard Barrell, a journalist and activist during the struggle against apartheid in South Africa, who is now a senior lecturer in journalism at Cardiff University. This series discusses best practices in enhancing the value of media coverage that campaigns receive.   “Pressing Your Case” interviews many activists, resistance leaders and scholars, including the Nobel Peace Prize laureates Aung San Suu Kyi and Archbishop Desmond Tutu, and the distinguished scholar of peace and conflict studies Dr. Mary Elizabeth King. Throughout the series, interviewees provide their own stories and expertise which together offer original and highly useful information.   In the first session, activists learn how they can affect coverage by developing a media strategy – by identifying the media landscape, the movement’s audience and constituencies, the types of media that work best to reach a given audience, and the content of the core message.   This session also explains the distinctions between state media, public service media, commercial media, and social media. The message to activists is clear: Getting the media’s attention is your problem, not theirs.   The second session provides a detailed explanation of a movement’s potential audiences and the best ways to reach them. This includes a more nuanced look at messaging, creating a visual identity, and evoking the human drama present in many effective stories. In this session activists learn that it is often best to deal with bad publicity straight away -- and learn how to do so.   The third session lays out the elements of a good story. Activists learn that for their purposes a good story usually focuses on a central character, often delivers a clear, positive message, and connects to what is already in the news. This session also provides tips for activists on how to become a good source and how to give effective interviews.   The fourth session encourages organizers and activists to create their own media and provide self-coverage for their movements, wherever possible, including the use of new technologies. In considering the risks and advantages of self-coverage, activists learn how it can produce substantive and riveting stories and increase their chances of reaching domestic, diaspora, and global audiences.   If activists want the help of the media, they need to understand how journalists work and how they develop and present their stories. “Pressing Your Case” is a unique tool in helping to orient and guide activists and campaign leaders in how to understand and deal with the mainstream media.   http://www.nonviolent-conflict.org/index.php/learning-and-resources/3732 Visit the related web page
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