2. Administration and implementation
I have myself suggested above that the global carbon tax or congestion tax on
international transport—airlines and shipping lines—could be administered by country
authorities and the revenues submitted to an international regulatory body which would also
bear the responsibility of dispensing the revenue. Tobin wanted the World Bank or the IMF
to take on the regulatory function for the Tobin tax on international currency transactions.
This could work in the beginning if, initially, the tax were to be an experiment.
I believe, however, that if a global tax such as the Tobin tax or carbon tax is to be
successfully implemented on a continuing basis, a global tax administration would be
eventually needed. Tanzi (1988) mooted the idea of a global tax administration sometime
ago. Thus it is not altogether unknown. But the required commitment from nationstates
would be enormous since it would surely imply an intrinsic change in the ways in which
governments of every political pursuation function i.e. a sacrifice of individual country
sovereignty for the sake of the global good.
Focussing on the global carbon tax, an international tax administration would be
essential not least because of the possibilities of evasion. Many of the expected problem areas
would parallel evasion problems associated with fuel excise taxes (Reno, 1990). Only, in this
case, there would be no reason to thrust upon individual countries the responsibility to carry
out the task for a global objective.
If the tax were not deftly designed, evasion could take various forms: (1) failure to
file information, reports or returns; (2) "daisy chain" schemes involving the use of dummy
companies that could claim to have paid the tax through a chain of complex paper
transactions; (3) filing false exemptions by claiming to use nontaxed or lower taxed fuels; or
(4) failure to pay taxes that have been already assessed or agreed upon by, say, setting up
dummy corporations showing little assets.
The objectives of the global tax administration would, therefore, have to include:
(1) improving regulations for screening, licensing and bonding of taxpaying entities;
(2) introducing innovative measures such as exclusive fuel coloration; (3) enforcing
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