Declaration on the need to implement a tax on the wealthiest sectors of society
Regional integration, progressive tax policies and review of external debt
The coronavirus pandemic has triggered a host of health, social, and economic challenges. Globally, and in Latin America and the Caribbean in particular, coordinated action is an unavoidable challenge. Where COVID-19 continues to plague any country in the region, the threat of its impact on the rest of the region will remain.
At the time the pandemic hit, the region was already experiencing extreme social and economic inequality and vulnerability, with financialized and primary-sector-dependent economies and regressive tax policies. Furthermore, in most countries, external debt acted as a tool to control public policy decisions by reducing resources allocated to sovereign development.
The current critical context stemming from the pandemic has deepened pre-existing inequalities. Low incomes, high levels of informal employment, unemployment, poverty, and extreme poverty are problems that our countries were already grappling with, and which have worsened and will likely make our societies more vulnerable and, at the same time, more exclusionary than before. It is true that the virus affects everyone equally, without distinction of class, race, ethnicity, or gender, but the socioeconomic conditions that constitute the environment where the virus spreads (housing, territory, income, access to healthcare, and technological resources) impose profound heterogeneity on the apparent equality of the past, always to the detriment of the most vulnerable. Inequality is the path along which the coronavirus advances: the worse the material conditions, the more severe the impact.
The countries of Latin America and the Caribbean are going through such a critical economic and social crisis that a group of specialists has likened it to that of the 1930s. According to the latest ECLAC report, a regional contraction of -5,3% of GDP is estimated for 2020, along with a drop in exports of around 15% and a net unemployment of almost 12 million in the region, on a labor force with 53% informality (ECLAC, 2020).
According to Oxfam data, 2017 saw the largest increase in history in the number of people worldwide whose fortunes exceed one billion dollars, with a new billionaire emerging every two days. The wealthiest 1% of the population amassed 82% of global wealth, while the poorest half saw no benefit at all (Oxfam, 2018). And in Latin America, in particular, inequality remains one of the most pressing structural problems. Furthermore, governments lack transparent information regarding who owns the most profitable companies, who the wealthiest individuals are, and how they generate their income. The financialized and globalized model of capitalist accumulation in recent years has facilitated the flight of vast resources abroad into secret accounts, beyond the control of nation-states.
From the Working Group “Business Elites, State and Domination,” we believe that in this critical moment we are experiencing, possibly the most difficult of our generations, we must observe the actions of business elites, design and implement redistributive policies with a progressive tax component that taxes the most privileged sectors, and review the public external debts of different countries. The current crisis is a unique opportunity to do so. The need to implement a solidarity and emergency tax on the wealthiest sectors must be placed at the center of the public agenda.
Today, what is at risk is the lives of others, especially those in the most vulnerable situations. It is time to initiate a well-founded and concrete regional discussion on this issue, one that strengthens national debates and paves the way for a solution with greater regional integration, always with the goal of a shared future characterized by greater equality, solidarity, and social inclusion.
CLACSO Working Group
Business elites, the state, and domination
May 2020
This statement expresses the position of the Working Group on Business Elites, State and Domination and not necessarily that of the centers and institutions that make up the CLACSO international network, its Steering Committee or its Executive Secretariat.
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