Here’s a brilliant, visionary and socially just new idea: let’s tax the world’s billionaires so we can raise more than $400 billion a year for poor countries. Great idea, UN.
This payment is one of many proposed in a report that predictably points a finger at wealthy nations for not doing their fair share to help poorer countries. Broken record, I say.
Reporting on the story, AFP writes:
The annual World Economic and Social Survey says it is critical to find new ways to help the world's poor as pledged cash fails to flow.
The report estimates that the number of people around the globe worth at least $1 billion rose to 1,226 in 2012.
There are an estimated 425 billionaires in the United States, 315 in the Asia-Pacific region, 310 in Europe, 90 in other North and South American countries and 86 in Africa and the Middle East.
Together they own an estimated $4.6 trillion so a one percent tax on their wealth would raise more than $46 billion, according to the report.
"Would this hurt them?" it questioned.
"The 'average' billionaire would own $3.7 billion after paying the tax. If that billionaire spent $1,000 per day, it would take him or her over 10,000 years to spend all his or her wealth," the report says.
Where to begin.
Let’s take a look at foreign aid’s track record if, as the report seems to suggest, throwing more money at a problem is really what will fix the situations. Foreign aid does little more than prop up dictators and their cronies, rarely reaching the poor that do need the assistance. If you’ve ever heard of the ‘resource curse’ or what natural resources like diamonds or oil do to a country well, aid functions much the same way. Essentially, the revenue reduces the incentive by the government to invest in human capital, legal and institutional reforms and instead adds fuel to the fire that is the patronage system.
William Easterly on the topic:
In any case, dictators have received a remarkably constant share—around a third—of international aid expenditures since 1972. The proportion of aid received by democracies has remained stuck at about one fifth (the rest are in a purgatory called “Partly Free” by Freedom House). As for US foreign aid, despite all the brave pronouncements such as the ones I’ve quoted, more than half the aid budget still went to dictators during the most recent five years for which figures are available (2004–2008).
And there are still modern-day counterparts to Mobutu and Bokassa. Paul Biya, the dictator of Cameroon, is marking his twenty-eighth year in power in 2010 by receiving the latest in a never-ending series of loans from the International Monetary Fund with imaginative labels like “Poverty Reduction Growth Facilities.” Biya, whose government also enjoys ample oil revenues, has received a total of $35 billion in foreign aid during his reign. There’s been neither poverty reduction nor growth in his country: the average Cameroonian is poorer today than when Biya took power in 1982.
In February 2008, Biya’s security forces killed one hundred people during a demonstration against food price increases and also against a constitutional amendment that will extend his rule to 2018. Many of the victims were “apparently shot in the head at point-blank range.”5 The IMF justification for the newest loan in June 2009 noted laconically that these “social tensions” have not recurred and “the political situation is stable.”6
Enough said on that point. But seriously, the Robin Hood creed is really getting old, especially coming from the hypocritical morality police. Sure, it’s one thing if a billionaire would like to donate some of their earned money to the "cause" but quite another to attempt to imbue them with some sort of existential guilt so they cough it up. Not to mention, the ROI would be utterly dismal.
Another stellar report from the one and only. Can't wait to see what they come up with next week.