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The World - Taxation: Global Taxation and Tax Harmonization	SJG
	Aug 19, 2003 19:11 PDT

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GLOBAL TAXATION AND TAX HARMONIZATION

By Joan Veon
August 20, 2003
NewsWithViews.com

The first mention of global taxation is in the book of Luke in the New
Testament when Caesar Augustus decreed that "all the world should be taxed."
The only other recognizable world empire since Rome which spans the world is
the United Nations birthed in 1945. What we are seeing currently is the move
toward global taxation and tax harmonization between the nation-states.

Part I - Global Taxation

I started to follow the concept of global taxation when I read a magazine
put out by Bella Abzug's group, Women's Environment and Development
Organization-WEDO, that said the idea of global taxation was going to be
part of the discussions at the 1995 Social Summit in Copenhagen.
Concurrently, the 1994 Human Development Report published by the United
Nations Development Program-UNDP, called for a number of global taxes:
pollution tax of $1 per barrel of oil consumed, a tax of 0.005% of 1% on the
value of each international currency transaction (referred to as the Tobin
Tax--today over $1.9T runs around the world on a daily basis looking for the
highest return and quickest play) and restructuring aid to poor countries by
increasing Official Development Assistance-ODA to 0.7% of Gross National
Product. At that time, if all of these various schemes were approved, they
would have provided the UN with an annual income of $250B compared to the
$10B they spent in 1993!

In 2000 at the UN Millennium Summit, the kings, princes, presidents and
prime ministers of this world affirmed the need for the United Nations to:
reduce by 50% the number of people living on less than $1 a day and the
number of people who suffer from hunger; ensure that all boys and girls in
the world complete primary education, reduce the mortality rate among
children under five by 66%, halt and reverse the spread of HIV/AIDS as well
as malaria and other major diseases, integrate the principles of sustainable
development into country policies and reverse the loss of environmental
resources, reduce by half the number of people without access to clean
drinking water and improve the lives of 100 million slum dwellers by 2020.
In order to pay of all of these new goals, a form of perpetual income is
needed by the United Nations. While all of these goals transcend the
constitutional responsibilities of national governments, the UN needs to
have some kind of global taxation in order to pay for these new and added
responsibilities.

At the Financing for Development Conference held in March 2002 in Monterrey
Mexico, the presidents and prime ministers of many countries met to discuss
how to meet these goals. Secretary-General Kofi Annan opened the conference
by saying, "You, ladies and gentlemen, are the leaders to whom the world's
peoples have entrusted their destiny. Your peoples look to you for a common
effort to solve their problems." Instead of respective national congresses
and parliaments directing their president or prime minister, here was an
international "civil servant" directing them! Do you see the switching of
power and position that is taking place?

For a number of years, the UN has been calling for an increase in Overseas
Development Assistance. Begun in the 1970s, the developed countries agreed
to set aside a percentage of tax revenues to give to other countries by way
of aid. The top three countries that receive most of our ODA are Russia
($1.154B) Israel (almost $1B) and Egypt ($799M). In preparation for the
Financing for Development Conference, President Bush announced in March
2002, a 50% increase or $5B in the amount of ODA so that by 2006 it will
increase to $15B (in comparison, New York faces a $3.5B budget shortfall and
California has a $30B deficit). The $5B will go into a "Millennium Challenge
Account" intended to support initiatives to improve the economy and
standards of living in developing countries whose leaders have agreed that
they have to measure up to the aid by making changes to their laws and in
the structure of their government.

Since 1995 the United Nations has floated the idea of a global tax called
"The Tobin Tax" which has been named after its originator. This scheme would
tax all the money which flows around the world on a daily basis looking for
the highest return. While the Tobin Tax has been considered too complicated
to administer and set up, at Monterrey two British groups, War on Want and
The New Economics Foundation, held a workshop where they put forth a legal
framework for how the tax could be implemented on a global level. They also
proposed a "Global Development Commission" which would basically act as an
international treasury.

While the final document did not specifically advocate the "Tobin Tax", the
final document or "Monterrey Consensus" reported the recommendations from a
number of "Roundtables" that were comprised of business leaders, NGOs,
churches and country leaders. Several key roundtables which included the
United States, the Holy See, United Kingdom, World Economic Forum, the IMF,
World Bank, Zurich Group and others all called for: "an international
taxation organization should be created to tackle issues of international
coordination of tax policies, environmental taxes and taxes on currency
transactions, taxation on carbon emissions and a new allocation of special
drawing rights".

Part II - Tax Harmonization

With regard to tax harmonization, there are concerted efforts at this point
in time for countries to harmonize their tax policies. Interestingly enough
the Bush tax proposal has at its centerpiece the elimination of double
taxation of dividends which for the past 30 years, has been a key topic at
the United Nations. Furthermore, the Bush tax plan will change our ENTIRE
TAX CODE from a tax on income to a value added tax or flat tax on purchases.
Let's examine both of these.

First, the United Nations started working on a Model Double Taxation
Convention as early as 1968 with a final convention finalized in 2001 with
the purpose of reducing the complexity and to facilitate trade and
investment between countries. In the past, it was recognized that a
worldwide multilateral tax agreement would not be feasible but a treaty
signed by two countries would be.

According to a recent article in the Financial Times, the US and the UK
signed a treaty the end of March to eliminate withholding tax on dividends
paid by a subsidiary to its US or UK-based parent. It also co-ordinates the
tax treatment of US and British pension plans in the two countries as the US
will not be withholding taxes on British pension funds' dividend earnings in
the US. I believe in time, there will be no taxation between countries as
this is part and parcel of complete tax harmonization between the
nation-states, investors and corporations.

Furthermore, the proposed Bush tax plan is part and parcel of harmonizing
our tax codes with other countries. Among OECD countries, the US has a sales
tax of 7% with the average consumption tax in Europe at 17.2%. We have,
however, the highest personal income tax of almost 40% while the EU average
is almost 24%. Under a VAT, the highest tax bracket will be reduced by at
least 19% while the worker class which pays no tax will be increased to 21%.

I have to agree that the flat tax mechanism will simplify taxation, however,
we have to understand that since 1981 a dozen major tax laws were passed.
The number of changes (laws) made to the Internal Revenue Code total over
100. Is it possible that the laws were changed so in order to then put forth
a system of simplification? However, we should understand something far more
serious, a flat tax is feudalistic as it will increase the cost of living
substantially by taxing every purchase and take away all of the current
deductions that Americans enjoy.

A flat tax will be just that-it will take away all of our deductions and
expose every purchase to taxation, with the exception of food. The
percentage taxed can then be raised according to the amount of income the
government needs to pay its debts. By the way, our government has borrowed
$5T from Social Security and $13T from Medicare. On top of that, we now have
the Iraqi War to pay for. On top of that, a major change in tax laws will
add to our deficits as a result of the elimination of the double taxation
which is at the very heart of tax harmonization.

Lastly, according to VAT expert, Alan Tait of the IMF, "the rise of the VAT
is an unparalleled tax phenomenon. The history of taxation reveals no other
tax that has swept the world in some thirty years. It is no longer a tax
associated solely with the European Community. Every continent now uses the
VAT." All of this will eventually lead to a global taxing authority.

� 2003 Joan Veon - All Rights Reserved

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GLOBAL TAXATION AND TAX HARMONIZATION 
 
 
 
By
Joan Veon August 20, 2003 NewsWithViews.com
The first mention of global taxation is in the
book of Luke in the New Testament when Caesar Augustus decreed that "all the
world should be taxed." The only other recognizable world empire since Rome
which spans the world is the United Nations birthed in 1945. What we are seeing
currently is the move toward global taxation and tax harmonization between the
nation-states. 
Part I - Global Taxation
I started to follow the concept of global
taxation when I read a magazine put out by Bella Abzug's group, Women's
Environment and Development Organization-WEDO, that said the idea of global
taxation was going to be part of the discussions at the 1995 Social Summit in
Copenhagen. Concurrently, the 1994 Human Development Report published by the
United Nations Development Program-UNDP, called for a number of global taxes:
pollution tax of $1 per barrel of oil consumed, a tax of 0.005% of 1% on the
value of each international currency transaction (referred to as the Tobin
Tax--today over $1.9T runs around the world on a daily basis looking for the
highest return and quickest play) and restructuring aid to poor countries by
increasing Official Development Assistance-ODA to 0.7% of Gross National
Product. At that time, if all of these various schemes were approved, they would
have provided the UN with an annual income of $250B compared to the $10B they
spent in 1993! 
In 2000 at the UN Millennium Summit, the kings,
princes, presidents and prime ministers of this world affirmed the need for the
United Nations to: reduce by 50% the number of people living on less than $1 a
day and the number of people who suffer from hunger; ensure that all boys and
girls in the world complete primary education, reduce the mortality rate among
children under five by 66%, halt and reverse the spread of HIV/AIDS as well as
malaria and other major diseases, integrate the principles of sustainable
development into country policies and reverse the loss of environmental
resources, reduce by half the number of people without access to clean drinking
water and improve the lives of 100 million slum dwellers by 2020. In order to
pay of all of these new goals, a form of perpetual income is needed by the
United Nations. While all of these goals transcend the constitutional
responsibilities of national governments, the UN needs to have some kind of
global taxation in order to pay for these new and added responsibilities.

At the Financing for Development Conference
held in March 2002 in Monterrey Mexico, the presidents and prime ministers of
many countries met to discuss how to meet these goals. Secretary-General Kofi
Annan opened the conference by saying, "You, ladies and gentlemen, are the
leaders to whom the world's peoples have entrusted their destiny. Your peoples
look to you for a common effort to solve their problems." Instead of respective
national congresses and parliaments directing their president or prime minister,
here was an international "civil servant" directing them! Do you see the
switching of power and position that is taking place? 
For a number of years, the UN has been calling
for an increase in Overseas Development Assistance. Begun in the 1970s, the
developed countries agreed to set aside a percentage of tax revenues to give to
other countries by way of aid. The top three countries that receive most of our
ODA are Russia ($1.154B) Israel (almost $1B) and Egypt ($799M). In preparation
for the Financing for Development Conference, President Bush announced in March
2002, a 50% increase or $5B in the amount of ODA so that by 2006 it will
increase to $15B (in comparison, New York faces a $3.5B budget shortfall and
California has a $30B deficit). The $5B will go into a "Millennium Challenge
Account" intended to support initiatives to improve the economy and standards of
living in developing countries whose leaders have agreed that they have to
measure up to the aid by making changes to their laws and in the structure of
their government. 
Since 1995 the United Nations has floated the
idea of a global tax called "The Tobin Tax" which has been named after its
originator. This scheme would tax all the money which flows around the world on
a daily basis looking for the highest return. While the Tobin Tax has been
considered too complicated to administer and set up, at Monterrey two British
groups, War on Want and The New Economics Foundation, held a workshop where they
put forth a legal framework for how the tax could be implemented on a global
level. They also proposed a "Global Development Commission" which would
basically act as an international treasury. 
While the final document did not specifically
advocate the "Tobin Tax", the final document or "Monterrey Consensus" reported
the recommendations from a number of "Roundtables" that were comprised of
business leaders, NGOs, churches and country leaders. Several key roundtables
which included the United States, the Holy See, United Kingdom, World Economic
Forum, the IMF, World Bank, Zurich Group and others all called for: "an
international taxation organization should be created to tackle issues of
international coordination of tax policies, environmental taxes and taxes on
currency transactions, taxation on carbon emissions and a new allocation of
special drawing rights". 
Part II - Tax Harmonization 
With regard to tax harmonization, there are
concerted efforts at this point in time for countries to harmonize their tax
policies. Interestingly enough the Bush tax proposal has at its centerpiece the
elimination of double taxation of dividends which for the past 30 years, has
been a key topic at the United Nations. Furthermore, the Bush tax plan will
change our ENTIRE TAX CODE from a tax on income to a value added tax or flat tax
on purchases. Let's examine both of these. 
First, the United Nations started working on a
Model Double Taxation Convention as early as 1968 with a final convention
finalized in 2001 with the purpose of reducing the complexity and to facilitate
trade and investment between countries. In the past, it was recognized that a
worldwide multilateral tax agreement would not be feasible but a treaty signed
by two countries would be. 
According to a recent article in the Financial
Times, the US and the UK signed a treaty the end of March to eliminate
withholding tax on dividends paid by a subsidiary to its US or UK-based parent.
It also co-ordinates the tax treatment of US and British pension plans in the
two countries as the US will not be withholding taxes on British pension funds'
dividend earnings in the US. I believe in time, there will be no taxation
between countries as this is part and parcel of complete tax harmonization
between the nation-states, investors and corporations. 
Furthermore, the proposed Bush tax plan is part
and parcel of harmonizing our tax codes with other countries. Among OECD
countries, the US has a sales tax of 7% with the average consumption tax in
Europe at 17.2%. We have, however, the highest personal income tax of almost 40%
while the EU average is almost 24%. Under a VAT, the highest tax bracket will be
reduced by at least 19% while the worker class which pays no tax will be
increased to 21%. 
I have to agree that the flat tax mechanism
will simplify taxation, however, we have to understand that since 1981 a dozen
major tax laws were passed. The number of changes (laws) made to the Internal
Revenue Code total over 100. Is it possible that the laws were changed so in
order to then put forth a system of simplification? However, we should
understand something far more serious, a flat tax is feudalistic as it will
increase the cost of living substantially by taxing every purchase and take away
all of the current deductions that Americans enjoy. 
A flat tax will be just that-it will take away
all of our deductions and expose every purchase to taxation, with the exception
of food. The percentage taxed can then be raised according to the amount of
income the government needs to pay its debts. By the way, our government has
borrowed $5T from Social Security and $13T from <SPAN
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On top of that, we now have the Iraqi War to pay for. On top of that, a major
change in tax laws will add to our deficits as a result of the elimination of
the double taxation which is at the very heart of tax harmonization. 
Lastly, according to VAT expert, Alan Tait of
the IMF, "the rise of the VAT is an unparalleled tax phenomenon. The history of
taxation reveals no other tax that has swept the world in some thirty years. It
is no longer a tax associated solely with the European Community. Every
continent now uses the VAT." All of this will eventually lead to a global taxing
authority. 
� 2003 Joan Veon - All Rights Reserved
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