Roger Thayer Stone Center For Latin American Studies

Tulane University

Tax To Finance The SDGs, But Not To Undermine Them

This blog post was jointly authored by Nora Lustig, Brahima Coulibaly, Ian Gary, Sanjeev Gupta, Warren Krafchik & Wilson Prichard

This week over 170 policymakers, government officials, and members of academia, civil society and international organizations will gather in Berlin to discuss the future of the Addis Tax Initiative (ATI). The overarching goal of the ATI is to improve domestic revenue mobilization (DRM) in order to finance the Sustainable Development Goals (SDGs). More than 55 countries, regional and international organisations have joined the ATI, which commits donors to collectively double their assistance to DRM, developing countries to step up their tax collection efforts, and all members to ensure “policy coherence for development.” However, noticeably absent from the ATI’s progress monitoring is the issue of equity. Indeed, analysis by Oxfam finds that only 7% of DRM support reported by ATI donors in 2017 contained clear goals related to equity or fairness in revenue systems.

The importance of equity
If the primary goal of DRM projects and reforms is simply to collect more revenue, this can have negative consequences for development efforts. For example, revenue targets (like collecting 15% of GDP in tax) can create perverse incentives to collect wherever it is most feasible- which can harm those without political power such as the poor or women the most. Tax and transfer systems in low and middle-income countries are, in general, far less effective than those in OECD countries at reducing poverty and inequality. In fact, research by the CEQ Institute shows that in 16 out of the 29 countries analyzed, taxes and direct transfers to the poor actually increased income poverty. Of course, part of that pattern reflects the inadequacy of social spending, but it equally reflects the need for a greater focus on the equity implications of tax reforms.

Priority areas for increasing equity in DRM
Given that in low and middle-income countries, taxes on consumption currently make up over 60% of revenues, there is a great deal of room for making tax systems more equitable at the national level. We suggest four priority areas for reform:

1. Strengthening taxation of income and wealth: OECD countries collect about 10% of GDP in personal income taxes, while non-OECD countries collect only slightly more than 2% of GDP on average. There is much developing countries can do to better tax professional incomes, increase the progressivity of income tax schedules, and tax inheritance and capital gains. When it comes to wealth, it remains largely undertaxed, despite a surge in ultra-high net worth individuals (especially in developing countries). An increasing amount of that wealth is being concentrated in real estate, yet property tax collection is similarly low. Non-OECD countries on average collect merely 0.5% of GDP from property taxes (compared to 2-3% in OECD countries). If low and middle-income countries as a group could reach 1.5%, this would be equivalent to an additional $28.9 billion in government coffers annually: more than total combined aid disbursed by Canada, France, Netherlands, Norway and Sweden in 2017.

2. Rationalizing the use of tax incentives: Tax incentives to attract investment can play a legitimate role in economic policy. Unfortunately, studies suggest that tax incentives in developing countries frequently continue to be characterized by excessive discretion, poor monitoring and little transparency. The result is reduced revenue and little new investment – in effect, a handout to corporations and wealthy interests. More transparent and accountable governance of tax incentives is needed.

3. Reducing the burden of consumption taxes and informal and nuisance taxes on the poor: While many assume that the poor do not pay much tax in low-income countries, they actually bear a heavy fiscal burden due to a wide array of consumption and informal taxes, small subnational taxes and levies, and formal and informal user fees to access essential services. In low and middle-income countries, consumption taxes make a significant proportion of the poor poorer than they were before taxes and transfers. Unless the poor can be sufficiently compensated with transfers, exemptions for basic foodstuffs and other essential goods may thus be necessary. Studies from Sierra Leone and the DRC suggest that total formal and informal burdens of direct taxes, levies and user fees make up as much as 10-20% of the incomes of poor households. Limiting these burdens should be given significantly greater priority.

4. Enhancing the participation of accountability stakeholders: Civil society organizations, academic institutions, women’s rights groups, and journalists have a critical role to play in monitoring and pressing for increased fairness in tax systems, voicing the concerns of the vulnerable, and advocating for the translation of tax revenues into public benefits. Nevertheless, in 2017, only 7% of DRM aid (reported to ATI) supported these actors.

Parallel action is also needed at the global level to make the ATI’s third commitment to “policy coherence” a reality:

1. Reforming the international tax system: While the BEPS Action Plan was a useful first step in trying to combat aggressive tax avoidance, it is not enough. Low-income countries continue to be disadvantaged by restrictive tax treaties and often still have little voice in global decisions that impact their taxing rights. All countries should be given the opportunity to raise their voice in the BEPS 2.0 negotiations, even if they are not members of the OECD Inclusive Framework – a situation that pertains to half of ATI partner countries. Meanwhile, existing international rules continue to be difficult to implement in lower-income countries, which are substantially more dependent on corporate tax revenues than OECD countries. A continued push for developing country taxing rights and priorities, including simplified approaches to enforcement, is needed.

2. Increasing cooperation on tackling offshore tax avoidance and evasion by wealthy individuals: It is estimated that Africans hold $500 billion in financial wealth alone offshore, which results in governments losing around $15 billion per year in unpaid taxes. Progress must be made to include developing countries effectively in automatic exchange of information processes and ensure effective collaboration in cases of tax evasion, while strengthening rules on beneficial ownership.

3. Continuing external support: In low-income countries, even the most substantial improvements in DRM will not generate enough revenue to finance adequate social protection and human development floors. External support such as aid will therefore remain critically important in pursuing equity at the global level.

Prioritizing equity in the ATI agenda
The theme of this week’s conference is “Towards a Roadmap for the ATI post-2020.” In drawing that roadmap, we are calling on ATI members to focus more explicitly on equity and inclusion. Along with the priorities outlined above, we propose that members of the ATI:

1. Adopt specific indicators on revenue composition in monitoring progress on Commitment 2, in order to prioritize not only collecting more revenue, but from more progressive sources, like direct taxes on income and property, rather than indirect taxes on consumption.

2. Regularly assess, under Commitment 3, tax spillovers and the distributional impact of tax policy reforms. ATI donor countries should conduct tax spillover analyses to ensure that their own corporate tax rules and practices, and tax treaties, are not undermining their DRM support. ATI partner countries should conduct distributional impact assessments in order to ensure the drive for more revenue does not come at the expense of achieving the SDGs, particularly on inequality and poverty.

3. Make a collective commitment to increase tax transparency. All government ATI members should commit to transparency on data about tax collection, tax policy decisions, administrative practices, and the amount of revenue raised from each type of source. In addition, all ATI members should commit to encouraging and facilitating the engagement of accountability stakeholders, and to support the effective representation of developing countries in international policy-making forums.

Rhiannon McCluskey (ICTD), Paolo de Renzio (IBP), Nathan Coplin (Oxfam) and Ludovico Feoli (CEQ) also contributed to this piece.

For more on this topic, read our brief: What Might an Agenda for Equitable Taxation Look Like?

  • Ludovico Feoli

    Permanent Researcher and CEO, CIAPA, Executive Director - Center for Inter-American Policy and Research at Tulane University

  • Nora Lustig

    Professor - Economics, Samuel Z. Stone Chair of Latin American Economics

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Lunch with LAGO featuring Ruben Luciano

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Join the Latin Americanist Graduate Organization (LAGO) on Friday, 1/24 at 12pm for the latest installment of our bi-weekly lunch series. Ruben Luciano is a Ph.D. student in the Tulane University History department, specializing in modern Latin American (specifically, Dominican) history, the military under dictatorship, intersectionality, and gender. He also has two Master’s degrees in the Social Sciences and Health Communication. He’ll be speaking on his thesis project, entitled “Queering the Trujillato: Reinterpretations of Loyalty, Criminality, and Homosociality in the Dominican Military from 1930-61.” Afterwards, we’ll open the floor for a Q & A, allowing for further conversation about Ruben’s work, more practical questions about the dissertation research and writing experience, and navigating the grants application process as a Ph.D. student.

The Labyrinth will be serving mini paninis, bagels, savory spreads and dips, desserts (including tres leches cake) and fresh juices. Please come hungry!

Tunica-Biloxi Language & Culture in the Classroom

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Saturday, January 25, 2020
9:00 am – 12:30 pm
Tunica-Biloxi Language & Culture in the Classroom

This collaborative workshop is designed for middle to high school Social Studies educators to enhance the teaching of the Tunica community while highlighting this group as part of a series of ancient civilizations currently taught at the K-12 level. This workshop is the first one in the series aimed at increasing and extending the current teaching of ancient civilizations in the Americas. The local focus on Louisiana indigenous people and culture will enable educators to create deeper connections when teaching about indigenous identity across the Americas such as the Maya, the Aztec and the Inca.

This workshop will introduce participants with little or no prior knowledge to ancient Tunica history, art, and language, with special focus on the role of food and native foods of this region. Language Instructors Donna Pierite and Elisabeth Pierite Mora of the Tunica-Biloxi Language & Culture Revitalization Program (LCRP) will share the history of the Tunica-Biloxi Tribe beginning in 1541 up to the 1700s when the tribes reached the Avoyelles Prairie. Through story, song and dance they will share the Tunica language and Tunica-Biloxi culture. They will highlight the cultural educational initiatives of LCRP, and provide a list of online resources and samples of pedagogical materials for attendees.

Sponsored by the Middle American Research Institute, S.S. NOLA, and the Stone Center for Latin American Studies.

Bate Papo! Primavera 2020

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A weekly hour of Portuguese conversation and tasty treats hosted by Prof. Megwen Loveless. All levels are welcome! Meetings take place on Fridays at different hours and locations. See the full schedule below:

January 17th, 11 AM, LBC Pocket Park
Treat: Suco de maracuja

January 24th, 3 PM, Boot
Treat: Suco de caju

January 31st, 4PM, Cafe Carmo (527 Julia St.)
Treat: Suco de caja

February 7th, 11 AM, LBC Pocket Park
Treat: Agua de coco

February 14th, 11 AM, LBC Mezzanine
Treat: Guarana

February 21st, 12PM, PJs Willow
Treat: Cha de maracuja

February 28th, 2PM, Sharp Residence Hall
Treat: Cafe brasiliero

March 6th, 10 AM, LBC Mezzanine
Treat: Cha matte

March 13th, 1 PM, LBC Pocket Park
Treat: Suco de goiaba

March 20th, 3 PM, Greenbaum House
Treat: Limonada a brasiliera

March 27th, 12 PM, LBC Mezzanine
Treat: Batido de abacate

April 3rd, 11 AM, LBC Pocket Park
Treat: Suco de acai

April 17th, 1 PM, LBC Pocket Park
Treat: Caldo de cana

April 24th, 2 PM, Boot
Treat: Groselha

Graduate Student Writing Group

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The Graduate Student Writing Group convenes on Fridays from 1:30 – 3:30 PM. These structured writing sessions are open to Latin Americanist graduate students in all departments. Students, who arrive with a project and a goal, work in communal silence during two 45 minute blocks separated by a 10-minute coffee break. All meetings will be held in the Latin American Library Seminar Room. Co-sponsored by the Stone Center and the Latin American Library.

Ancient Civilizations K-16 Series for Social Studies Educators

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Ancient Civilizations
K-16 Educator Workshop Series
Spring 2020

For educators of grade levels: K-12

Tulane University’s Middle American Research Institute (MARI), Stone Center for Latin American Studies (SCLAS), S.S. NOLA, and AfterCLASS will host a professional development workshop series open to all K-16 school professionals. These workshops will challenge educators to learn about the unexpected impact and connections of Ancient civilizations from Central America to the Gulf South. In particular, the workshops will foster a deeper comprehension of how to incorporate art, language and food across the disciplines. Participants will learn unique ways to incorporate the Tunica, Maya and Aztec cultures into the classroom in a variety of subjects. Registration for each workshop is $5 and includes light snacks, teaching resources, and a certificate of completion.

The workshop series will prepare teachers:

  • To utilize digital humanities resources in the classroom;
  • To design culturally appropriate primary and secondary research projects;
  • To teach about Pre-Columbian and ancient civilizations, language, geography and foods;
  • To encourage student self-determination through meaningful and relevant cultural projects.

Saturday, January 25, 2020
9:00 am – 12:00 pm
The Tunica of the Lower Mississippi River Valley
Middle American Research Institute – Seminar Room
6823 St. Charles Avenue
This workshop will introduce participants with little or no prior knowledge to ancient Tunica history, art, and language, with special focus on the role of food and native foods of this region. Participants will explore the physical, cultural and linguistic characteristics of the region. Representatives of the Tunica community will introduce their language and culture and the work they do to preserve their language.

Friday, March 6, 2020
4:00 pm – 6:00 pm
Understanding Maya Fare: Beyond Tamales and Cacao
AfterCLASS – Taylor Education Center
612 Andrew Higgins Blvd. #4003
In collaboration with the Annual Tulane Maya Symposium, this workshop focuses on foods of the Maya. Participants will explore the foods of the Maya focusing on the role of food over time. Join us as we hear from chocolate specialists and our Kaqchikel language scholar will discuss the importance of corn. REGISTER HERE.

Thursday, May 2020
Aztec Mexican Art and Culture
Participants in this workshop will explore the art and culture of the Aztec community. Date TBD

Teaching Cuban Culture & Society: A K-12 Summer Educator Institute in Cuba

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APPLICATION DEADLINE: MARCH 15, 2020
Cost: $3580

Now, in its fifth year, the Stone Center for Latin American Studies and the Cuban and Caribbean Studies Institute at Tulane University are proud to announce the return of our annual two-week summer educator institute exploring the geography, culture and history of Cuba. For an educator, Cuba is rich with lessons to bring into the classroom. This program highlights the important historical and cultural connections between the United States and Cuba. Participants will explore key sites and meet local experts and artists who will provide unique insight for educators who teach such subjects as U.S./Latin American Relations, World Geography, World History, and Spanish among others. Come and visit the site of the historic Bay of Pigs, explore Milton Hershey’s sugar plantation and the Cuban national literacy campaign.

Fill out the online APPLICATION here, due March 15, 2020.

Additional materials needed:
  • Two letters of recommendation (please make sure to have at least one recommendation letter from a colleague at your school) Please email your recommenders the PDF above. They submit via email the complete recommendation letter.
  • Copy of Passport
  • $200 program deposit

THE PROGRAM INCLUDES:

  • Lodging at Casa Vera (double occupancy)
  • At least 1 meal a day (at Casa Vera and on excursions)
  • Transportation to/from airport to residence (if you arrive on time)
  • Medical insurance: Each participant will be covered for the entire program length by a travel health insurance policy.
  • Group tours and excursions, with associated transportation

THE PROGRAM DOES NOT INCLUDE:

  • Airfare to/from the U.S.: approx. $300-$600
  • Visa: $50-$100 depending on airline
  • Checked luggage ($25) + Overweight baggage: This constitutes anything in excess of maximum allowed luggage weight (50lbs), both going and returning from Cuba.
  • Communication: Internet and long distance/international calls
  • Additional meals (1 a day, snacks)
  • Taxi/ground transportation: Participants are responsible for expenses incurred getting around town during free time.
  • Admission to museums, events, etc.: Participants will be responsible for these expenses unless they are part of itinerary.
  • All materials and personal expenditures
  • Loss/Theft Travel Insurance: Please note only travel medical insurance is included in program. If you would like additional coverage (including insurance for loss of baggage, emergency cash transfers, etc.), it is recommended that you purchase additional insurance.

APPLICATION

Please email crcrts@tulane.edu or call 504.865.5164 for additional details.

Preview the Itinerary here