Global Taxes
by
Parthasarathi Shome
L Introduction
The world is undergoing rapid economic changes. Its problems are assuming
increasingly composite form while its economic growth is commonly found to be equity
reducing (World Bank, 1990; Chand and Shome, 1995). The quantum and nature of resources
available through multilateral financial institutional lending have been criticised as being
inadequate to redress particularly distressing increases in poverty. Though this is difficult,
if not impossible, to prove, there is a growing consensus that global taxes be identified and
their revenue be earmarked for the purposes of poverty alleviation and fruitful development.
This paper weighs various possibilities of global taxation. Many of the papers in the
conference are focussed on the efficacy of a global tax on international financial transactions
and on possible uses of the revenue thus generated. Consequently, this paper focusses on
other taxes, mainly global environmental levies, while also considering the potential usefulness
of international financial transactions as the base for a global tax. 1
Section II provides the setting of the paper by addressing the question: why global
taxes? The answer has to lie in the need to protect the global habitat for future generations
and to improve equity for the current generation, for both of which global use of the revenue
generated would be needed.
For the views of this author, prior to the holding of the U.N. Meeting, on the
suitability of international financial transactions as a global tax base, see Shome and
Stotsky (1995). For the U.N. Meeting, he was given the task of especially considering
other possibilities of global taxation, in particular, environment-related taxes, while
revisiting the essential elements associated with the arguments related to international
financial transactions taxes.