As a young professional, I saw the world as a place where everyone could roam free and become what they wanted. I studied economics, and free markets and fair competition seemed the best system ever.
However, while working in politics, I was exposed to a broader truth: it's easy to be a staunch liberal when sitting on top of the food chain. As a white male who received a good education in an advanced economy and was supported by a loving family, I've been better off than most of the people on this planet. There was very little "free and fair" in how I experienced the economy. If economic success was a marathon race, I rode a moppet while many others were running barefoot. If we want to change the world, we must change our mindset and see beyond our biases: there is no such thing as a level playing field & equal opportunities in an unregulated market economy. Pretending it can be the case means only applying bandages to a hemorrhage: we need to reconsider how the system works completely.
In yesterday's newsletter, I hinted that an equitist economy would prioritize the provision of essential services to people across the planet and shift taxation from labor to wealth. I also referenced the United Nations plan to use a fraction of Elon Musk's wealth to quell global hunger.
Continuing on this thread, today I will discuss the 'real great steal' of our times - almost $500 billion/year lost to multinationals tax evasion - and how labor should be taxed. Let's jump into this!
Suppose that wealth hoarding is finally constrained. Suppose that the rift between those owning most of the assets & capital and the rest of the population starts to shrink, slimming inequities away. Suppose that people start focusing on creating well-being - the real wealth - for themselves and their surroundings, and the economic system incentivizes them to do so (how? Wait for Business Equity 😉).
Still, some enterprises and some individuals will - from an economic standpoint - perform better than others. This is positive: one's contribution to societal well-being should be rewarded proportionally to their creativity, commitment, and courage; an equitist economy is one where people can express their full potential. Hence, ease of doing business is paramount for an equitist government.
However, some monumental distortions of the current economic system must be addressed with urgency.
First, major multinational companies have for long avoided supporting societies by paying their fair share, as legislators struggled to move beyond national borders to levy taxes. Due to this, the world has been deprived of at least $500 billion annually for a long time. A global minimum corporate tax rate of 15% will soon be imposed on massive multinationals through an OECD-sponsored deal, and profits will be allocated where sales are made. While this is a welcomed development, 15% is a shallow threshold: many economies have corporate taxations well above 20%, while those benefiting from profit shifting - like Ireland, with its current 12.5% corporate tax rate - will have only marginally to adapt. An equitist government would build a fair fiscal, corporate environment around the planet, harmonizing tax rates to a level where arbitrage among countries is no longer possible and ensuring that all sizable international companies are included in the scheme. To make this possible, a global governance with fiscal authority on multinationals is needed.
👉 [check out this analysis by Pim, the lead of Atlas Finance Team]
Once the issue of corporate contributions to society is tackled, an equitist economy shall ensure that also those individuals profiting exponentially from their economic activity do the same. Highlighting once more that the equitist doctrine does see economic activity as a positive development for society when one contributes to the well-being of the community, how should high labor income - for example, a multi-million dollar CEO package compensation - be treated fiscally? [Going back to the principle defined in the previous newsletter] If wealth is taxed - hence accumulation of wealth is disincentivized - labor should not be the focus of fiscal action. So, while a multi-dollar package should be taxed proportionally and progressively, it would be unreasonable to envision tax rates above - for example - 50% even for very high earners, as this would bring an unfair burden upon the shoulders of (very successful) workers.
However, measures to ensure a reasonable wage ratio between the lowest and highest paid workers in companies should be envisioned. [continues with Business Equity]
THE READERS' CORNER
While the team and I continue to produce content for the upcoming Equitist Manifesto (here is a short draft), you can send some comments over, but also much more. Check below some interesting ways you can help in making the world a more equitable place.
- Interesting sources: If you want to deep-dive into the topic of corporate taxation, read this piece from Atlas Finance Lead, Pim - it's way more eloquent and precise than anything I could put together :)
- Join the team: become a member or a volunteer at Atlas to support the creation of our vision. For example, our Policy, Campaign, or Communication Teams would be glad to have your support to tackle societal discrimination: join us, and our Community Team will guide you to the right people ;)
- Spread the word: In our quest to create an equitable society, we produce this daily newsletter, (soon) a weekly podcast, and every month together with our 20,000+ members, we launch campaigns to turn words into action. Please support our work and share the link to this newsletter.
In the coming days, we will jump into regulating and operating businesses in an equitist economy. I hope you are enjoying this deep-dive: personally, I am fascinated by how we can build a free and fair economy, and I am slowly starting to see it.
Two closing notes:
- In the next 10 days, I will be traveling to the U.S. to promote Atlas; hence my newsletter will be less regular! And hit me if you are in NYC or D.C.
- Today is "Giving Tuesday," so if you like what we do, please donate to Atlas :)
We'll change the world!
PS English is not my first language. I want to reassure you that before assembling the Equitist Manifesto, some editors will review all this material and ensure it's correct and flows well together ;)
✒️ Send feedback and ideas at [email protected]