Chirac calls for international taxation at Davos
This year, CTT is a central issue both at the World Economic Forum at Davos, and at the World Social Forum in Porto Alegre.
Hailed by long applause, Chirac repeated the message from the Summit Conference on combating hunger and poverty, hosted by Brazil's Lula da Silva at New York in September 2004, and the conclusions of the "Landau report", commissioned by himself at the beginning of last year.
The central part of Chirac's speech was devoted to development financing. Chirac spoke at length of the widening gap between the world's rich and poor and how to overcome it by an alliance between the functioning of the markets and solidaric action of states and the civil society.
The French president called upon the corporate and polical leaders at Davos to take steps in two directions: 1) the British initiative called the International Financial Facility (IFF); France supports this, he said; and b) international taxation to create a stable and predictable flow of money to development aid. Chirac also said international taxes could back up the IFF.
First among international taxes Chirac mentioned the currency transactions tax (CTT). "It would not be a Tobin Tax", he stressed, because the rate would be very low, only 1/10000, (1 basis point) in order not to become an obstacle to the functioning of financial market. Also, the CTT would be applied only to a fraction of the transactions, Chirac said, thereby contradicting the original proposal, which James Tobin made already in the 1970s, to tax all financial transactions.
Chirac continued on the subject of tax evasion. Banks should cooperate and lift their veils of secrecy in order to help curb tax evasion. It would also be possible for banks to pay a levy to compensate for the tax evasion, Chirac said.
Other potential international taxes mentioned by Chirac were a levy on air fuel, and a tax on air tickets. 1 dollar per ticket would generate 3 billion dollars per year, he constated, and went on to say that the present international aid, and the revenue from international taxes as well, is still disproportionally small in comparison with the global flows of capitals and trade.
Mikael Böök
