Trillions of dollars are now needed every year to meet humanity’s global needs for climate action and for a basic standard of living for all. Fortunately, there is enough money to meet all these needs. The problem is that a vast amount of the world’s wealth is currently held by a tiny number of ultra-wealthy individuals and corporations, and they are not spending it to meet humanity’s needs.
Tax justice will make the world’s wealth available to meet the world’s problems. Without tax justice (and debt cancellation) climate justice will be unattainable and humanity will not be able to successfully address the climate crisis. Action is needed in many nations and by the global community as a whole.
Tax justice will increase the ability of countries in the Global South to fund climate action and improve standards of living for their people. These same steps will enable countries in the Global North to gain financial resources for their own climate action, for basic services domestically, and for meeting their sizable international climate finance obligations to the Global South. Also taxing the fossil fuel industry and removing fossil fuel subsidies will speed the transition to renewable energy.
Tax justice includes:
- Taxing the income and/or wealth of the very wealthy so they pay their fair share of humanity’s needs for:
a. climate mitigation, adaptation, and loss and damage;
b. a just transition; and
c. for development–including needs for food, housing, health, education, social services, and income, both domestically and globally. - Making polluters pay. Taxing fossil fuel companies and the financial industry entities that have financed and insured them. These taxes will help pay for the tremendous damage that fossil fuels have caused through climate change and air pollution and will also help eliminate the production of fossil fuels by making them less and less profitable.
- Eliminating tax havens and tax avoidance mechanisms that the wealthy use to avoid paying taxes, especially the ones Global North companies use to avoid paying taxes in Global South nations. This will require global cooperation so the very wealthy of the world pay their fair share regardless of where they live or put their money.
- Making taxes progressive enough to reverse the growing concentration of wealth.
- Dramatically reducing expenditures on militaries and warfare.
- Eliminate all government subsidies for producers of fossil fuels. Where consumers’ energy purchases are being subsidized, especially in poorer countries, provide equivalent or greater subsidies for clean energy alternatives to fossil fuels.
Grossly unequal wealth distribution
Wealth is created by everyone in the world who works (whether that work is paid or unpaid). Our current economic system moves the bulk of global wealth to the already wealthy nations and to a very small minority of their populations—the very rich. The world’s richest 1% have more wealth than the bottom 95% of the world’s population. In the U.S. and Europe the top 10% have more than 60% of the wealth; while the bottom half of the population have less than 2.6%. The wealthy continue to grow wealthier.
