Policy Proposals for Tobin Tax Implementation



Introduction

There are many aspects to establishing a new system such as the Tobin Tax. These include the following major policy areas, with text explanations included below:

I. Adoption of Taxes
II. Collection and Enforcement
III. Expenditures Policy
IV. Implementing Global Priority Projects

Policy activists and analysts are encouraged to make policy proposals on any of the issues raised below, and also to check out the bibliography section to make sure they are not re-creating the wheel! For those groups working on policy development, or engaged in some aspect of academic research or policy analysis, please consider writing a position paper, and feel free to contact us.

I. Adoption of taxes

By what mechanisms would taxes like the Tobin Tax be adopted? Proposals range from national adoption, to multilateral cooperation, to universal treaty adoption. All are feasible. Some of the issues raised are:
  1. sovereignty
  2. what are the various models of Tobin-style taxes that have been proposed and are considered economically feasible?
  3. harmonization - if national laws are adopted, do they need to be harmonized to be effective?
  4. entry into force/ timing - due to certain market dynamics, would simultaneous adoption be advisable?
  5. what would be the roles of existing national, regional, and international institutions during the adoption period? what roles would NGO's play in helping to formulate policy proposals?
  6. How to get started? An international conference?
II. Collection and Enforcement
  1. How would such taxes be collected? There is an excellent treatment of this issue in Tobin Tax by ul Haq, Kaul, and Grunberg (see bibliography). Some of the issues that should be addressed include:
    1. reformation of existing institutions to provide for democracy, transparency, and other important reforms.
    2. establishment of a collection repository with earmarked funds for basic human and environmental needs
    3. degree of harmonization of national enforcement laws needed
    4. establishment of a partition of revenue between international earmarked trust funds and national funds.
  2. What institutions should be involved in the enforcement aspect of tax collection? Again, the book Tobin Tax (ul Haq et al) treats this subject matter, and deals with issues such as:
    1. avoidance
    2. reporting
    3. sanctions

III. Expenditures Policy

We are promoting local community input into expenditures priorities and participation planning for any proposed revenue, all the way through to implementation and monitoring of environmentally sustainable and basic needs projects. Such community voices will help to counteract the "pork-barrel" approach to appropriations, and help to meet sustainable development goals. It is essential that grassroots policy proposals focus on prioritization of the revenue to meet basic human and environmental needs first. This will be more likely to be addressed if policy proposals addressing the nuts and bolts of the following issues are put forth:

  1. Prioritization models to put basic needs first:
    1. establish human needs priorities in areas such as disaster aid, refugee services, fighting AIDS, literacy campaigns, habitat, and job development.
    2. establish environmental needs priorities in areas such as sustainable communities, land preservation, and environmental restoration.
    3. triage -- establish mechanisms to treat the most needy first, in order to save lives of humans and endangered species and ecosystems.
    4. prevention of "pork" and corruption. Fight the urge of politicians to capture the "pork" and spend it unwisely, and establish criteria to avoid corrupt use of funds.
    5. earmarked trust funds for basic needs - This is a sensible solution for the public trust, but detailed policy proposals are needed.
    6. approaches for sharing community project models, from local to local, around the world.
    7. role of GIS-based planning and mapping in community projects
  2. Project oversight mechanisms. How will action projects addressing basic human and environmental needs be administered? The mix of institutions administering projects is likely to be local, national, regional, and international, and likewise to be split across a wide spectrum of sectors such as food and agriculture, health, environmental restoration, education, and dozens of others. But it may be wise to establish a set of guidelines for overall approaches, so that action projects will be productive. This raises issues such as:
    1. basic needs criteria for projects. Utilize mechanisms similar to how grantmaking organizations choose worthy projects. Project criteria should include need, timeliness, realistic objectives, organizational strength, action plans, adequate methodologies, mechanisms for monitoring.
    2. guarantee of social, political, and economic rights. This should be a criteria for receipt of funding.
    3. capacity building -- Develop mechanisms, such as training, organizing, and monitoring, to assure that the nongovernmental organization or agency receiving funds has the skills and organizational capacity to do the work.
    4. contracting - Aspects of possible contract approaches, such as those of grantmaking organizations.
    5. nongovernmental organizations. Local NGO's role in implementing projects, building civil sector capacity, and sharing project models with other local areas. Active recruitment and preference for local NGO's.
    6. small projects models preferred -- local and NGO administration.
    7. project monitoring. Again, applying the grantmakers administrative model of monitoring and project feedback to assure compliance and wise expenditure of international public revenue.
  3. Criteria for allocation decisions. Once the revenue is generated, how will it be allocated? How will the decisions on allocation be made? What model of democracy or cooperation will be utilized? Some possible decision-making models are listed below, but there may be others that are more democratic or more workable:
    1. weighted voting models
    2. one nation/one vote models
    3. the ILO (International Labor Organization) tripartite model
    4. the GEF (Global Environmental Facility) modified weighted voting model
IV. Implementing Global Priority Projects

We can create ecologically sustainable communities engaged in worthwhile jobs designed to meet basic human and environmental needs...

With adequate funding to implement projects for urgent global priorities, we can meet our Sustainable Development goals and succeed in eradicating poverty! The following criteria should always be considered:

  1. Social, political and economic rights should be protected.
  2. Project designs should be tailored to the specific ecology of the local area.
  3. Labor intensive designs are preferred. Technology should simplify work, not replace humans.
  4. Create projects that create jobs.
  5. Basic needs first.
  6. Micro-credit finance approaches, both loans and grants (such as Grameen Bank)
  7. Utilize the "crew model", which trains small groups in techniques specific to their geographic area, and in skills of decision-making and other management aspects.
Model Projects for Global Priorities:
  1. Poverty Eradication Projects
  2. Environmental Restoration Projects
  3. Conservation and Preservation Projects
  4. Disaster Aid Projects
  5. Disease Prevention and Humanitarian Aid Projects
  6. Peacekeeping missions and projects

  1. Poverty Eradication Projects. With adequate public revenue invested in creating sustainable communities, we can create jobs while alleviating poverty. Projects should focus on basic needs, such as food; clothing; shelter and habitat; education and literacy; and health clinics and disease prevention.

    Links:
  2. Environmental Restoration Projects. After 150 years of the industrial revolution, numerous wars, and other human-related causes, the earth is in need of some healing efforts. Environmental restoration projects engage in tree planting, erosion control, alternative energy installations, stream restoration, and other related efforts. Environmental restoration does not replace the need for conservation and preservation of ecologically unique areas, nor does it serve to mitigate unwise resource management practices. However, it has the potential to create numerous jobs in both rural and urban settings throughout the world. The following criteria should be considered:

    Links:
  3. Conservation and Preservation Projects. Nothing can take the place of preserving the tiny remnants of ecosystems which will otherwise be lost. This effort creates fewer jobs, but is still necessary. There are some jobs possible in preservation areas and corridors, such as land stewards, park rangers, environmental education, endangered species monitoring, water monitoring, trail work, and non-invasive descriptive work such as technical writing and photography. Be sure to identify the ecologicallyl significant areas and corridors which must be protected.

    Links:
  4. Disaster Aid Projects. It is incomprehensible and unforgivable that in the modern era we are still unable to quickly reach people in need when disaster strikes. It is far more a failure of political will than a question of technology. Public and private projects that are striving to meet these needs should be at the top of the list as innovative sources of revenue become available.

    Links:
  5. Disease Prevention and Humanitarian Aid Projects. People are in need of assistance to meet basic needs on an emergency basis, as well as over the long term to build sustainable communities. These needs exist in both industrial and less developed nations, and are addressed by humanitarian organizations around the world. Additionally, because of wars, famine, and political persecution, populations are sometimes forced to move from their homelands to new areas, where they must live as refugees. Crises such as AIDS and other diseases must be dealt with as they occur. New revenue sources will help to adequately address these needs.

    Links:
  6. Peacekeeping missions and projects. Multilateral cooperation is helping to keep the peace in many parts of the world, both through cooperative task forces between nations, and through the ongoing peacekeeping operations of the United Nations. Further, efforts such as landmine removal, conflict resolution, and economic conversion help to create a political climate more conducive to peace and the protection of human rights. These efforts should be supported with adequate funding.

    Links:

Tobin Tax Initiative
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phone: (707) 822-8347, fax: (707) 822-4457
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