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Our humanity is the true source of economic growth and flourishing civilization

January 25, 2019

I am a practitioner of capitalism and a member of the 0.1 percent.

I have started or funded 37 companies. I was the first outside investor in Amazon. I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Yet the most important lesson that decades of experience at the heart of market capitalism has taught me is that morality and justice are the fundamental prerequisites for prosperity and economic growth. Greed is not good.

The problem is that almost every authority figure – in economics, politics and the media – tells us otherwise. You will hear plenty this week, as the global elite converge on the Swiss mountain resort of Davos to discuss the challenges facing our economies and our world. Yet, I can guarantee that despite all the talk, there will be no substantive questioning of the immoral foundation of our modern economies.

The current inequality crisis is the direct result of this moral failure. Our exclusive, highly unequal society based on extreme wealth for the few may seem sturdy and inevitable right now, but it will collapse. Before long, the pitchforks will come out and the ensuing chaos will benefit no one. Not wealthy people like me – and certainly not the poorest people who have already been left behind.

To avert this existential crisis, we must drive a stake through the heart of the neoliberal religion that instantly rewards greed at the expense of our future. We must replace it with a new economic framework that recognises that justice and inclusion are not the result of economic prosperity, but rather the cause of economic prosperity.

Only a society that seeks to include all its people in the economy can succeed in the long term: no company, and certainly no billionaire is an island. We owe our wealth to society – to the millions working each day for us at home and across the world, often for poverty wages. We owe our fortunes to governments, who provide the education, the infrastructure, and the research investment on which we build our empires. None of the companies I have invested in would have been able to function without this.

A fundamental prerequisite for a more just society is that the wealthiest should pay their fair share of tax. However, as Oxfam’s inequality report, “Private Wealth or Public Good”, demonstrates, this is not happening. Here in the United States, the richest in society – people like me – have just benefited from one of the biggest tax cuts in decades. Meanwhile our public schools are crumbling, and our healthcare system continues to exclude millions, leading to huge pain and suffering. The top rates of tax on the wealthiest people and corporations are lower than they have been for decades. Unprecedented levels of tax avoidance and evasion ensure that the super-rich pay even less.

There can be no moral justification for this behaviour beyond a discredited neoliberal dogma that if everyone maximises their selfishness, the world will somehow be a better place: that ever-lower taxation on the richest will somehow benefit us all; that health and education left to the mercy of the free market, available only to those who have the money to pay for them, is somehow more efficient. It has no economic justification, either. As Henry Ford famously identified, you can’t grown a business or an economy if people are impoverished.

I have absolutely no doubt in my mind that the richest in our society can and should pay a lot more tax to help build a more equal society and prosperous economy. As Oxfam shows, a fairer tax system could help ensure that every child gets an education, and that no one lives in fear of getting sick because they can’t afford their medical bills.

Ultimately it is our humanity, not the absence of it, that is the true source of economic growth and a flourishing civilization. This is not just an imperative for activists and academics but for all of us – including every billionaire. It is no longer a question of whether we can afford to do this but rather whether we can afford not to.

Nick Hanauer is an American entrepreneur and venture capitalist.

Our inequality crisis can be solved by ensuring corporations and wealthy individuals pay their fair share of tax

January 21, 2019

Every January I get a glimpse into a different world.

A world of billionaires, of business and political elites, cosying up to one other in the Swiss mountain resort of Davos for the Annual Meeting of the World Economic Forum.

Curious friends often ask if I have ever met a billionaire and what they are like. I tell them they were born lucky. Lucky to be born a man – 9 out of 10 billionaires are men; lucky to be born into a wealthy family – a third of billionaire fortune is the result of inheritance, lucky to get a decent education in a world where 262 million children don’t go to school.

For Oxfam the annual festival of wealth that is Davos is an opportunity to take stock of the crisis of extreme inequality. Our inequality reports have charted the rise and rise of the lucky few over recent years. Our latest report, “Private Wealth or Public Goods,” shows that the wealth of the world’s billionaires increased by twelve percent or $2.5 billion a day last year. A new billionaire was created every two days between 2017 and 2018.

Meanwhile, the poorest half of humanity, 3.8 billion people, saw their wealth shrink by eleven percent. Just under half the world’s population subsists on less than $5.50 a day – one school fee or medical bill away from falling into extreme poverty.

While women’s work is the bedrock of our economies, they do not see the benefits. Globally men earn 23 percent more than women and own 50 percent more wealth.

This extreme and growing gap between rich and poor is no accident. It is the result of policy decisions made by governments. Chief among them are decisions about how governments raise and spend our taxes.

Consider how wealth taxes have been reduced or eliminated in many rich countries and are barely implemented in the poor countries. Just four cents in every dollar of tax revenue collected globally came from taxes on wealth such as inheritance or property in 2015.

Consider how tax rates for wealthy individuals and corporations have been cut dramatically. Billionaires like Warren Buffet are paying lower rates of tax than their secretaries. In some countries, such as Brazil, the poorest 10 percent of society are paying a higher proportion of their income in tax than the richest 10 percent.

Governments add insult to injury when they fail to clamp down on tax dodging, leaving wealthy corporations and individuals to pocket billions in unpaid taxes. Poor countries lose around $170 billion a year as a result of tax dodging by wealthy individuals and corporations.

At the same time, governments are allowing vital poverty-busting public services such as healthcare and education to crumble for want of funds, or outsourcing these services to private companies that exclude the poorest. These services serve as the foundations on which people can work their way out of poverty and they’re being ripped away from ordinary people.

The consequences of these policy decisions are etched on the lives of millions of people around the globe, including the 10,000 people who die every day for want of healthcare.

Always, it is women and girls who are hardest hit. I think of the girls I know in my village in Uganda who are pulled out of school when money isn’t available to pay fees or the women who spend countless hours filling in the gaps, caring for children, the sick and elderly when public services fail.

Humanity can’t live with this. And we don’t have to. Government policies created this crisis – they can solve it by ensuring corporations and wealthy individuals pay their fair share of tax and investing this money in free quality healthcare and education for all.

We know this is possible. When the government of Ghana dropped fees for senior high school in September 2017, 90,000 more students walked through the school doors.

And we know a little change can go a long way. Oxfam estimates that a tiny 0.5 percent increase in tax on the wealth of the richest one percent could raise more than it would cost to educate all the children who are currently out of school and provide healthcare that would save the lives of 3.3 million people.

These ideas are not extreme – they are common sense. Even the International Monetary Fund is talking up wealth taxes, and says that higher income tax rates would help bring down inequality without being bad for growth. They are catching up with people around the world who know that going to school or seeing a doctor when you are sick should not be the preserve of a lucky minority.

They are the basic rights of all people, and the foundation for stable societies and strong economies. That’s the message I will convey in Davos this week.

Winnie Byanyima, Executive Director for Oxfam International, will be attending the World Economic Forum in Davos, Switzerland in January 2019.

Eight Reasons Why Oxfam Unwrapped Charity Cards Make the Perfect Ethical Gift

December 11, 2018

With more people on the hunt for ethical Christmas presents, an Oxfam Unwrapped card is a gift you can feel good about giving to someone you care about.

With these unique cards, you can make a loved one smile, while fighting poverty and protecting the environment, one gift at a time. Here’s how Oxfam Unwrapped makes an impact.

1. Helping people to overcome income inequality

Oxfam NZ’s work is focussed on providing families in the Pacific with sustainable, resilient pathways out of poverty. When you buy a gift such as a goat, chicken, onions or honey bees, you’re helping set up small businesses in Vanuatu and Papua New Guinea. The animals are well looked after and the aspiring farmers are offered support and training to give their ventures the best chance at success.

2. Improving access to education

We’re working with schools and families around the world to give children, especially the next generation of girls, a quality education. Oxfam’s approach is wide-ranging and includes improving facilities and the quality of teaching, inspiring communities to value education more highly, and providing school supplies.

3. Supporting those most in need

When tropical cyclones hit the Pacific, Oxfam is on the ground helping those who have been affected with hygiene kits and safe water, before going on to help communities rebuild their lives. Cards such as A Soft Landing After a Hard Fall or Water for a Family help to provide necessities for those affected by natural and man-made disasters, such as refugee crises.

4. Promoting gender equality

Educate and empower the next generation of women’s rights activists in places like Vanuatu with the Mana Wahine card. Women are supported with opportunities to generate sustainable livelihoods, and aspiring activists are trained in effective ways of campaigning for gender equality and the eradication of violence against women.

5. Go plastic free

Christmas Day can easily lead to an overload of waste, so we’ve made sure that your gift comes in organic, compostable and recyclable packaging and courier bags. Or even better: select a digital (PDF) card which you can download and send to be completely waste-free.

6. Showing kindness to animals

Our farmers given training to provide their animals with the best possible care and on visits to our programmes we find them healthy and enjoying life. Products we include alongside our cards in our Premium Gifts, such as Ethique Shampoo Bars, are cruelty-free and save on plastic.

7. Fair Trade all the way

Not only will you help aspiring farmers get a fair price for their produce, all Oxfam Unwrapped promotional products, like Fair Trade Chocolate, are ethically sourced from small producers. This means those all along the supply chain are paid a fair price for what they sell, leading to a more equal world for everyone involved.

8. Spreading good vibes and generosity

By gifting a gift card like Feed a Family for Christmas, you can enjoy your festive meal, with the knowledge that you’ve helped a family in need purchase food during a hard time. Cards like these help to provide vouchers for families, like Rohingya refugees who have fled Myanmar, so they’re able to purchase necessary food and spices.

Shop now to see the full range and learn more about the communities each Oxfam Unwrapped gift card supports.

Five Ways Oxfam Unwrapped Gift Cards Makes A Difference In The World

December 6, 2018

Giving someone a thoughtful and ethical present always feels good, but by giving an Oxfam Unwrapped charity gift card, you’re being generous in more ways than one.

We’ve rounded up the top five ways you’re helping to make a positive difference in the world when you give an Unwrapped charity gift card this Christmas.

1. You’re fighting to end poverty

All gift cards support Oxfam’s work and offer people in the Pacific and beyond the opportunity to earn a sustainable income. They help to provide training, support and resources to make sure small businesses thrive, in the face of challenges that can affect farming and fishing, such as climate change.

2. Helping families in crisis

Oxfam provides resources for those affected by natural disasters or displaced by conflict. Proceeds from Oxfam Unwrapped support the many humanitarian relief efforts around the world by providing food, clean water, solar lights and bedding to families in need.

3. Supporting women’s rights activists

By choosing an Oxfam Unwrapped gift card, you’re assisting the work of women’s rights activists around the world, who are calling for gender equality and an end to violence against women. Oxfam supports training for campaigners in countries such as Vanuatu, so they can educate others on creating a safer, more inclusive community.

4. Empowering curious minds with education opportunities

Education is a key pathway out of poverty, and improving access to education can change lives around the world. From Papua New Guinea to Pakistan, Oxfam helps to support teachers and provide resources such as books, blackboards, pens and clean water.

5. Spreading our mission to end the injustice of poverty

By sharing an Oxfam Unwrapped gift card with family and friends you’re helping to spread the word about the positive impact that can be made in communities around the world. It’s also an excellent way to educate younger family members about the diverse lives of families around the world. The more people learn about Oxfam’s life-changing programmes, the more successful we’ll be in creating a world free from the injustice of poverty.

Shop now to see the full range and learn more about the communities each Oxfam Unwrapped gift card supports.

Paradise Papers Scandal – One Year On

November 9, 2018

Just one year ago, 13.4 million leaked files from offshore service providers and company registries were made public.

This leak, known as the Paradise Papers, revealed the tax planning strategies of more than 100 multinational corporations, including Nike and Apple, as well as offshore activities by more than 120 politicians and world leaders.

Like always politicians were quick to react and promise reforms. But so far very little has happened. A new Paradise Papers is to be expected if no serious reforms are undertaken in the coming years. Just recently Zucman estimated that multinationals artificially shift almost half of their total overseas profits – 40 percent – to tax havens.

Tax dodging is fueling an inequality crisis where 82% of the wealth generated last year went to the richest 1% of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth. When corporations and the super-rich dodge taxes, it is ordinary people, and especially the poorest, who pay the price as governments balance the budget by raising their taxes and cutting vital public services. Poor countries are particularly hard hit by corporate tax dodging as they are twice as dependent on corporate tax revenues as rich countries.

Governments must take five immediate steps to stop corporations and the super-rich cheating poor countries out of over $100 billion in tax revenues every year..

Susana Ruiz, Oxfam’s tax advisor, said:“Stopping the tax scandals won’t be easy but it is not impossible if the political will is there. Oxfam’s five-point plan shows how governments can stop the tax scandals if they put the interests of the public over the demands of the super-rich and big business.”

Oxfam’s 5-point plan to stop the scandals calls on governments to:

1. Agree a global blacklist of tax havens based on comprehensive objective criteria and take strong countermeasures including sanctions to limit their use:

Governments have yet to agree an objective global list of tax havens. A farcical OECD – G20 blacklist published in June 2017 features just Trinidad and Tobago. The more comprehensive European Union list, published last December, omits European tax havens such as the Netherlands and Ireland that have been key players in the Paradise Papers scandal.

2. Create a global tax body where all countries can work together on an equal footing to agree the fundamental tax reforms that are needed to ensure the tax system works for everyone:

International tax reforms done little to prevent tax dodging in rich countries and even less in poor countries which were denied any real say in the reform process. Yet OECD and G20 member countries have blocked attempts by poor countries to create an independent tax body where all countries can work together to agree a second round of more fundamental reforms. This would include action to combat damaging tax competition.

3. Rebalance tax deals by making sure tax treaties do not exploit developing countries tax bases:

Poor countries often lose out from unfair tax agreements because they allow multinational companies to avoid paying tax in the country. Yet, international tax reforms led by the G20 and OECD ignored this issue – in part because poor countries were denied any real say in the process.

4. End tax secrecy for the super-rich by establishing a centralized public register of the individuals who own and benefit from shell companies, trusts and foundations publicly available:

Many countries have established registers of ‘beneficial owners but few have made the information publicly available. This means poor countries are unable to access the information to identify tax dodgers.

5. End corporate tax secrecy by ensuring all multinational companies make financial reports publicly available for every country where they operate:

The OECD initiative on country-by-country reporting falls well short of the mark as it does not cover all multinational corporations and it does not require companies to make their financial reports publicly available. This means poor countries are unable to access the information to identify tax cheats. Stronger European proposals on public country-by-country reporting, were due to be agreed this year, but are being blocked by EU member states such as Germany, Ireland, and Luxembourg.

Do You Remember The Paradise Papers?

November 5, 2018

Last year, the Paradise Papers laid bare the extent to which multinationals and extremely wealthy individuals exploit a broken global system.

This system allows them to avoid paying their fair share of tax which contributes to poverty and inequality around the world. One year on, it is clear we still need to do more.

The Paradise Papers revealed the murky world of tax avoidance. Global corporate giants, celebrities and politicians were exposed for stashing away their low tax/untaxed wealth instead of paying their fair share of taxes in the countries where they earned that wealth. This is money that poor governments could have invested in roads, schools, and hospitals to help their people escape poverty.

And it’s not the first time this broken tax system has been exposed.

A recent history of scandals

In 2014, the International Consortium of Investigative Journalists (ICIJ) revealed how more than 340 companies secured secret deals from Luxembourg allowing them to avoid paying billions in tax in the countries they operate. The Lux Leaks scandal – as it became known – described how some companies paid less than 1% of tax on their profits. This occurred by exploiting loopholes in tax laws around the world to avoid paying taxes.

The Panama Papers followed in 2016 and was one of the biggest leaks in the history of journalism. 11.5 million documents showed Panama-based law firm, Mossack Fonseca, at the center of a scandal involving people in more than 200 countries, 241,000 offshore entities and, in some cases, linking to terrible crimes.

The Paradise Papers was another wakeup call. It revealed how multinational corporations – like the four in our latest report – continue to funnel their profits to countries with very low, or no, taxes. This unfair tax avoidance deprives poor governments of much-needed income which they could then invest in the public services their people need to escape poverty.

Somebody pays – and it’s not the multinational corporations

Every hour, 35 women die due to inadequate maternal health care. That’s one every two minutes. And around the world women give up their jobs and essential income to take care of loved ones when the health system fails.

Even though tax avoidance hurts us here in New Zealand, worldwide women and children living in poverty pay the biggest price. When governments don’t have crucial funds to invest in their people, they are forced to balance their budgets by cutting back on the essential services that the poor rely on. Losing out on education and healthcare, women are deprived of the chance to improve their lives and lift themselves and their families out of poverty.

What has changed since the Paradise Papers?

Your stand against tax avoidance has led New Zealand to take positive steps towards addressing these issues within our nation. Our government has expanded the disclosure rules on foreign trusts recommended in the Shewan inquiry, passed the 2018 Tax Neutralization Act, and created the Tax Working Group to examine the structure, fairness and balance of New Zealand’s tax system. This is a great start. But it is not enough.

Multinational corporations still have the resources to exploit a complex global tax system. To fix this broken system, corporations need to publish country-specific financial information also known as Public-Country-by-Country Reporting. Transparency will ensure that poor governments get the revenue they are due, so they can invest in the services that save lives.