In March 2016, over 40 New York millionaires wrote a letter to the governor and state lawmakers calling for a 1% plan for tax fairness. Given the strenuous efforts that many wealthy individuals and businesses go to avoid paying tax, this was seen by many as a surprising move. The signatories to the letter said that given they have contributed to and benefited from the economic vibrancy of the state, they have not just the ability but also the responsibility to pay back. However, their apparent motivations were not just altruistic. They also cited that for long-term social and economic stability, investment in infrastructure and human capital are essential elements for prosperity.
At the same time the millionaires were writing their letter, Juan Pablo Bohoslavsky, the UN independent expert on the effects of foreign debt on human rights, was issuing his latest report how economic inequality affects the enjoyment of human rights. When apparently opposite sides highlight the same issue, it raises a number of questions. Why now? Why this growing realisation of the impacts of inequality on society? How is increasing inequality contributing to global insecurity? Can we address inequality using a human rights approach?
Economic inequality is a cause and consequence of policy choices available to and made by a range of actors—individuals, companies, governments, international and intergovernmental organisations. In terms of fiscal policies, these can range from tax breaks, tax havens, tax avoidance agreements to trade subsidies—the list goes on. Although many of these agreements may be technically legal, they do raise important moral and ethical questions. Many of these agreements tend to favour a small minority who, as a result, can enrich themselves many times over, widening the wealth gap even further. Beyond their dubious ethical nature, such arrangements can fuel social unrest with accompanying costs that can far outweigh the perceived economic benefits of investment incentives.
