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The European Union and Beyond

What Burden should Fiscal Policy bear in Fighting Global Injustice?

Gillian Brock
University of Auckland, New Zealand
Gillian Brock
University of Auckland, New Zealand

In this paper I examine how reforming our international tax regime could be an important vehicle for realizing key aspects of global justice. Indeed, failure to make such reforms entails that the basic institutional structure of the global economy is seriously unjust.

I begin by outlining some of the important principles that define what we should aim at in pursuing global justice. I argue why aiming at improved institutional quality at both the state and global level has a crucial role to play in achieving global justice goals.

I then outline some of the ways in which the status quo falls short in delivering the necessary institutional quality, for instance, in enabling such a vast amount of tax escape which undermines effective government and opportunities to develop in beneficial ways. I also discuss various positive proposals for levying global taxes. Currency Conversion Taxes seem especially worthy of serious consideration, as do Carbon Taxes and expansions on the Air Ticket Tax. Since effective, efficient and equitable tax systems can help build effective states, I also discuss ways in which developed countries can usefully discharge their duties to assist developing ones by offering assistance in implementing such tax systems.

In a context of globalization, fiscal policies cannot achieve equity at national levels alone. Many concerns, such as clamping down on tax evasion and harmonizing corporate tax rates can only effectively be tackled at a global level. As I also discuss, feasible arrangements for tackling such issues are available, as are mechanisms for collecting and disbursing funds in ways that promote accountability and compliance. Given my arguments then, failing to reform our tax arrangements means that the basic institutional structure of the global economy is seriously unjust and we therefore have important reasons to address these inadequacies as a matter of urgency.
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