Biden tax plan could bring an end to severe Covid

A new report - A Global Tax Plan for a Global Pandemic - has shown how Biden's tax plan combined with reform of global tax rules would provide sufficient finance to vaccinate all those at risk of severe Covid disease. In so doing, it could help bring an end to the Covid-19 pandemic.

In April 2021, President Joe Biden released his Made in America Tax Plan. A key feature of the plan was his proposal for a global minimum corporate tax rate of 21%. Economists have shown how this plan, when combined with reformed global tax rules (known as the METR proposal - Minimum Effective Tax Rate), could generate $640 billion of additional funding for national governments. This report analysed the impact those funds could have on 34 of the poorest countries in the world, including India, and have shown that for the vast majority of countries, it would be sufficient for those countries to vaccine all those most at risk of severe Covid. In this way, this reformed tax plan could help bring an end to the pandemic.

The COVAX facility is the current mechanism to provide the vaccine to lower income countries, but this is underfunded. In addition, poorer countries also need to find the resources to fund the distribution of the vaccine within their own borders. The sums generated by a 21% global minimum corporate tax when combined with the METR proposal are sufficient to both fully fund COVAX and ensure that many lower income countries have enough funds to vaccinate at least 20% of their population. This figure represents the proportion of the population at risk of severe Covid - that is frontline health and social care workers, those over 65, and those with underlying health conditions. Hence, the proposed tax plan could help end severe Covid in these countries, and therefore across the globe. In this way, multinational corporations would be making their contribution to a crisis that has not gone away and that remains a threat to us all.

The former Archbishop of Canterbury, Dr Rowan Williams, commented: "At last there are signs of some wealthier economies waking up both to their responsibilities and to the actual steps they can take to flesh out those responsibilities. We have a crucial widow of opportunity to reframe our attitudes to taxation and make it work for all. This report is a welcome prompt to the action we need for this."

The Rt Rev Dr Alan Smith, Bishop of St Albans said: "Covid-19 is a global crisis which requires a truly global solution. Whilst wealthier countries have been able to push ahead with a rapid vaccination program, the outbreak in India is a stark reminder of what happens when lower income countries are left behind. Church Action for Tax Justice's proposals envisage the framework for a moral and fair global tax system that would reduce the vaccine gap and allow the world to collectively emerge from this pandemic. Global taxation reform must be towards the top of the OECD's agenda."

And Dr Justin Thacker, Director of Church Action for Tax Justice, who led the research added: "The failure of wealthier nations to provide vaccine coverage in lower income countries is not just a moral scandal, it is also a national one. None of us are safe until the whole world is safe. The proposals outlined in our report show one way in which the world's largest corporations could step up and help end this pandemic. The first act of philanthropy is to pay your taxes, and national governments now have a mechanism to make that happen."

LINKS

Church Action For Tax Justice - www.catj.org.uk

Read the report here: www.catj.org.uk/globaltaxplan.html