UN tax committee moves forward on wealth taxation, but appears to face organised opposition from OECD
There is growing international momentum in support of wealth taxes, at the United Nations and G20 – but suspicions are running high that the OECD and some of its member countries will seek to block progress today at the UN tax committee.[1]
This afternoon in New York, the committee will debate the work of the Subcommittee on Wealth and Solidarity Taxes. The Subcommittee is presenting the guidance it has prepared on wealth taxes, and the structure of model legislation for a net wealth tax. The Subcommittee is seeking the committee’s approval to bring a first draft of the model legislation to the next session, for discussion, and then to submit a final model law.[2]
This would create the basis for countries around the world to introduce consistent and straightforward legislation for wealth taxes. At a technical level, this would provide a valuable tool, especially for the most capacity-constrained countries. At a political level, the creation of a model law would go a long way to normalising the introduction of wealth taxes, which has often been the subject of intense opposition and lobbying by wealthy elites. Prof Jayati Ghosh and Prof Joseph Stiglitz, the co-chairs of the Independent Commission for the Reform of International Corporate Taxation (ICRICT) recently wrote to the UN tax committee chairs to request that their members “support the preparation of a UN Model Wealth Tax Law… as it can greatly accelerate and facilitate the adoption of wealth taxes around the world.”[3]
The growing momentum for wealth taxes is clear. The G20 group of countries, chaired this year by Brazil, has made wealth taxes part of its core agenda.[4] Meanwhile, the first inputs have been received for the UN process to draft terms of reference for the negotiation of a framework convention on international tax cooperation, and many countries have highlighted wealth taxes as a priority for inclusion.[5]
It is in this context, however, that the OECD is understood to have signalled its opposition at the UN tax committee to allowing the work of the Subcommittee to go forward. Concerns are mounting, in advance of today’s discussions, that the technical experts of certain OECD countries will also seek to block progress.
Nominally, the committee is purely technical and members are not expected to represent their own government’s positions. However, it has been noted that some members are also now their government’s political representatives in the negotiations of the framework convention, raising questions over their independence as nominated experts, and leading to suggestions that some OECD members may still be seeking to oppose globally inclusive tax rule-setting under UN auspices.
Alex Cobham, chief executive of Tax Justice Network, said:
“Wealth taxes are vital tools to curb the damaging, extreme inequalities our societies face, and to raise revenue to support wider social progress. It is of significant concern that the OECD may be seeking to obstruct progress at the UN tax committee. There is no requirement for the OECD to support wealth taxes, of course. And if the G20 group were to give a mandate for work in this area in future, it is obvious that it should be taken forward at the United Nations. But the OECD has no legitimacy, as a regional membership organisation, to seek to block global efforts in a crucial area for countries to pursue progressive revenue-raising efforts.
“The Tax Justice Network commends the work of the Subcommittee on Wealth and Solidarity Taxes, and urges the UN tax committee to move ahead with the development of model wealth tax legislation.”
-ENDS-
Notes to editor
- The UN tax committee (the Committee of Experts on International Cooperation in Tax Matters) is a committee of tax experts nominated by, but not formally representative of, UN member governments. They work to promote better tax policy measures, and have often advanced measures that ensure developing countries are also able to benefit. The meeting this week is held in New York, and the full details and agenda are available here.
- The Coordinator’s Report from the Subcommittee for Wealth and Solidarity Taxes can be found here.
- The ICRICT co-chairs’ letter can be found here.
- A recent statement from the G20 chair, Brazil can be found here.
- Inputs to the work of the Ad Hoc Committee to Draft Terms of Reference for a United Nations Framework Convention on International Tax Cooperation can be found here.