UNITED NATIONS: U.S. Rejects Plan for Global Taxes.

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Jan 21 1996 (IPS) - Latest focal point in the feud between the United Nations and its largest donor member, the United States, is a proposal to impose global taxes to resolve the cash crisis crippling the world body.

The proposal – advocated by some think tanks and several U.N. member states – has been rejected outright by Washington.

U.S. State Department spokesman Nicholas Burns said Friday that Washington would not support any form of worldwide tax to support the United Nations.

Burns was reacting to a statement by Secretary-General Boutros Boutros-Ghali in which he reiterated the call for international taxes – primarily because most member states are not paying their dues either in full or on time.

The United States, the largest single contributor to the U.N. budget, is also the largest defaulter – owing more than 1.2 billion dollars.

Despite its poor payment record, Washington continues to believe that the best way to ensure adequate and predictable funding is through reforms which result in a fair system of financing and which reduce the overall operating costs.

“The United Nations does not have the authority to impose or collect any form of tax, and the U.S. government would not consent to any proposal to grant it such authority,” Burns told reporters.

“Any form of international tax would be inconsistent with the intergovernmental nature of the United Nations, and we believe that it could undermine the sovereignty of the member states,” he added.

The proposal has also become a major target of Senator Jesse Helms, an ultra-rightwing Republican and chairman of the Senate Foreign Relations Committee who urges deep U.S. funding cuts in the world body. Helms has reportedly received the backing of Senate Majority Leader Robert Dole, the frontrunner in the Republican race to challenge Clinton in next year’s presidential elections.

“It will be a cold day in hell before we allow the United Nations to directly tax American citizens,” Helms spokesman Marc Thiessen said. “The United Nations is not a world government. We prefer to stick with the present system where member states make their own contributions to the United Nations,” he said.

Last week, in another spat with the U.S., Boutros-Ghali implicitly accused Washington of “dishonesty” in its attempts to justify the withholding of funds from the world body.

First, they deny funding, making the United Nations ineffective, he said. Then, they turn around and argue they are withholding funds because the United Nations is ineffective, Boutros-Ghali said.

The U.S. struck back asking the Secretary-General to tone down his political rhetoric in dealing with member states. “He should be a little concerned with his choice of words,” U.S. Ambassador Madeleine Albright told reporters.

The new dispute follows a statement Boutros-Ghali made over the British Broadcasting Corporation (BBC) in London where he supported the proposal to raise international taxes.

U.N. Spokeswoman Sylvana Foa told reporters that “alternative sources of finance” for programmes and activities in the U.N. system have been recommended by many commissions and study groups, most recently by Yale University in the U.S.

During the 50th anniversary summit in October, she said, a number of member states had raised such ideas. “The Secretary- General’s remarks in London should be considered against this background, and in the context of trying to run an Organisation effectively and efficiently when he is denied the resources to do so,” Foa said.

“If member states were to agree to an alternative source of revenue, the expenditures would be totally under the control of member states, as is the case with all current expenditures in the U.N. system,” she said in an attempt to U.S. fears.

The proposals advanced by Boutros-Ghali include a fee on speculative international financial transactions, a levy on fossil fuel use (or its resulting pollution), a stamp tax on international travel and a levy on global currency transactions.

Malaysian Prime Minister Mahathir bin Mohamad, who supports global taxes, told the General Assembly last year that not only should there be levies on air travel and a tax on speculative flows of capital but also an international tax on the arms trade.

“Of these, the last one, based on the principle that he who profits from the tools of war must contribute to the maintenance of peace, merit urgent attention and adoption,” Mahathir said.

James Tobin, winner of the 1981 Nobel Prize for Economics, already has proposed a tax on international currency transactions. A 0.5 percent tax on all such transactions could net a revenue of more than 1.5 trillion dollars a year, according to Tobin.

Swedish Prime Minister Ingvar Carlsson told the 50th anniversary meeting last month the United Nations must develop systems of financing that ensure adequate, predictable and sustainable levels of funding.

“The mandatory contributions should be the backbone of the financing of the core activities, but the dependency of one large contributor must be reduced,” he said referring to the 25 percent contribution made by the U.S.

“I believe the time has come to seriously discuss alternative methods of getting the necessary resources to the U.N. system,” he added. Carlsson said the United Nations should explore the possibility of creating an international tax on foreign currency transactions.

“We need to consider the possibility of introducing charges for the use of common global resources such as the sealanes for ships, or the ocean fishing areas, or an extra tax on airline tickets,” he added.

Addressing the summit, Pakistani Prime Minister Benazir Bhutto proposed a tax on international financial transactions, a levy on international travel, and a tax on the exploitation of space or the oceans.