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4% pa Global Wealth Tax to stop the 17M pa Global Avoidable Mortality Holocaust

by: Dr Gideon Polya
Friday June 27, 2014 - 09:30

There is a Global Avoidable Mortality Holocaust in which currently 17 million people die avoidably each year from deprivation and deprivation-exacerbated disease in the Developing World (minus China) [1].

This is happening on Spaceship Earth with the flight deck under the control of the 10% richest who have about 90% of the wealth of the World and who in turn are controlled by One Percenters who own about half the wealth of the World.

An annual global wealth tax of about 4% would yield US$16 trillion annually and enable raising all countries to annual per capita incomes equivalent to the $6,000 per person per year of China and Cuba, countries for which annual avoidable mortality is zero (0) [1].

This is a feasible option for stopping the Global Avoidable Mortality Holocaust. Indeed a progressive annual wealth tax ranging up to 10% for the richest has been proposed for democracy and economic sustainability reasons by French economist Professor Thomas Piketty in his important book “Capital in the Twenty-First Century” [2]

Avoidable mortality (avoidable death, excess mortality, excess death, deaths that do not have to happen) can be defined as the difference between actual deaths in a country and deaths expected for a peaceful, decently-run country with the same demographics (i.e. similar birth rate and age distribution).

For relatively high birth rate Developing World countries the baseline death rate is about 0.4% or 4 persons per 1,000 of population each year, However for the Developing World (minus China) (2015 population 4,632 million) the death rate is 7.7 deaths per 1,000 of population per year (2010-2015) , this yielding an avoidable death rate of 7.7 - 4.0 = 3.7 avoidable deaths per 1,000 of population per year and 3.7 avoidable deaths per 1,000 of population per year x 4,632 million persons = 17.1 million avoidable deaths annually [3].

The annual avoidable deaths as a percentage of population is about is about 0.0% for Overseas European countries (the US, Canada, Australia, New Zealand, and Apartheid Israel), 0.01% (East Asia), 0.03% (Latin America and the Caribbean), 0.05% (Western Europe), 0.25% (Arab North Africa and Middle East), 0.26% (South East Asia), 0.26% (Turkey, Iran and Central Asia), 0.31% (Eastern Europe), 0.38% (South Asia), 0.39% (the Pacific), and 0.97% (non-Arab Africa) [1].

Notably, annual avoidable deaths as a percentage of population rate is 0.0% for the US, Cuba and China but these countries have annual per capita incomes (annual GDP per capita) of $51,163, $6,301 and $6,070, respectively, and under-5 infant mortality (under-5 infant deaths per 1,000 live births) of 7, 6 and 14, respectively [1].

It is glaringly obvious that zero avoidable mortality (as defined above) and extremely low infant mortality is possible in countries such as Cuba and China with annual per capita incomes 8 times lower than that of the US provided the countries have good governance, high female literacy, good primary health care and peace [1]. Accordingly, it is useful to calculate how much it would cost in wealth transfer from the rich to the poor in order to bring all countries up to a Cuba level of annual per capita income.

I have performed such a calculation using data made available on Wikipedia, specifically “List of countries by GDP (nominal) per capita” (US dollars, UN data, 2012) [4] and “List of countries by population” (2013-2014) [5]. For each country I simply subtracted the country’s per capita from the Cuban per capita ($6,301) and multiplied this difference by the country’s population. Note that all values are in US dollars.

Below is a list of impoverished countries indicating the amount in billions of US dollars required each year to bring them up to the Cuban level of annual per capita income of US$6,301 per person per year. The countries are listed in descending order of population to enable some useful comparisons between countries with similar populations e.g. China requires vastly less than impoverished India and Thailand requires vastly less than its list neighbours impoverished Burma and the Democratic Republic of the Congo (such countries that are making good strides towards a Cuban annual per capita income are noted below).

Cuba (0), China (315.3), India (5,959.0), Indonesia (678.9), Pakistan (958.9), Nigeria (824.0), Bangladesh (857.2), Philippines (370.3), Vietnam (411.3), Ethiopia (523.1), Egypt (276.0), Democratic Republic of the Congo (406.1), Thailand (33.9), Burma (312.5), Ukraine (109.8), Tanzania (255.8), Kenya (237.6), Algeria (35.6), Sudan (183.4), Uganda (201.6), Iraq (59.4), Morocco (111.2), Uzbekistan (135.8), Nepal (149.6), Afghanistan (143.3), Yemen (124.3), North Korea (142.3), Ghana (115.8), Mozambique (135.60, Ivory Coast (117.7), Syria (91.4), Madagascar (124.5), Cameroon (104.0), Sri Lanka (70.7), Angola (13.7), Burkina Faso (97.9), Niger (101.2), Malawi (97.3), Guatemala (46.8), Ecuador (10.3), Mali (85.8), Cambodia (81.3), Zambia (71.7), Zimbabwe (73.0), Senegal (68.0), Chad (70.3), South Sudan (60.7), Tunisia (23.5), Guinea (62.40, Rwanda (59.9), Somali (63.7), Haiti (58.3), Bolivia (37.4), Benin (55.4), Dominican Republic (5.4), Burundi (57.2), Honduras (33.9), Tajikistan (43.6), Papua New Guinea (30.4), Serbia (7.1), Paraguay (16.4), Jordan (12.4), Laos (32.1), El Salvador (15.9), Eritrea (36.7), Togo (35.4), Sierra Leone (34.5), Nicaragua (27.1), Kyrgyzstan (29.6), Central African Republic (26.9), Georgia (12.0), Republic of the Congo (12.9), Palestine (17.5), Liberia (25.5), Bosnia & Herzegovina (6.8), Moldova (15.1), Mauritania (18.3), Armenia (8.9), Mongolia (7.7), Albania (7.0), Jamaica (2.6), Namibia (1.3), Macedonia (10.6), Gambia (10.9), Kosovo (6.3), Guinea-Bissau (9.9), Zanzibar (7.5), Swaziland (4.0), Timor Leste (1.8), Djibouti (4.1), Fiji (1.5), Guyana (2.1), Bhutan (2.8), Comoros (2.8), Solomon Islands (2.6), Western Sahara (3.0), Cape Verde (1.2), Belize (0l5), Vanuatu (1.0), Sao Tomé & Principe (0.9), Kiribati (0.5), Tonga (0.20), Federated States of Micronesia (0.3), Tuvalu (0.03).

The total annual cost of lifting all of these countries – excluding China for which annual avoidable mortality is already zero - up to a Cuban level of annual per capita income is US$16, 016.5 billion or about $16 trillion .

However we can also distinguish 9 poor countries in this list that are already doing much better than countries with a similar population, namely Thailand (33.9), Ukraine (109.8), Algeria (35.6), Angola (13.7), Ecuador (10.3), Tunisia (23.5), Dominican Republic (5.4), Serbia (7.1), and Bosnia & Herzegovina (6.8). The total cost for this group of countries is $246.1 billion and we could accordingly estimate an amended cost of getting all countries to roughly a Cuban level of per capita income as US$16,016.5 billion – US$246.1 billion = US$15,770.4. billion.

From this analysis we can estimate that the total annual cost of lifting all countries – excluding China for which annual avoidable mortality is already zero - up to a Cuban level of annual per capita income is about US$16 trillion per year.

It is obviously a wonderful thing to reduce annual global avoidable mortality to zero. The example of Cuba shows that this is achievable with peace, good governance, high female literacy, good primary health care and an annual per capita income increase to about $6,000 requiring a global input of about $16 trillion globally each year. The required wealth transfer of $16 trillion per year could be achieved by a global wealth tax. According to the World Wealth Report of Credit Suisse, global wealth in 2013 reached $241 trillion, with the richest 10% owning 86% percent of the wealth, the top 1% owning 46% and the bottom 67% owning only 3% [6, 7].

Professor Thomas Piketty in his important book “Capital in the Twenty-First Century” [2] has estimated a current Western accumulated wealth to annual income ratio of about 5-6 and advocates a global progressive tax on accumulated wealth to “contain the unlimited growth of global inequality of wealth, which is currently increasing at a rate that cannot be sustained in the long run and that ought to worry even the most fervent champions of the self-regulated market” ([2], p572) . Professor Piketty specifically advocates a global wealth tax ranging from “0.1 or 0.5 percent on fortunes between 1 and 5 million euros … and as high as 5 or 10 percent for fortunes of several hundred million or several billion euros” ([2], p572).

Piketty ([2], p438) gives 2 measures assuming a global wealth totalling $367 trillion (although he warns of uncertainties in such estimations) . Raising $16 trillion annually would require an overall annual wealth tax of $16 trillion x 100/$367 trillion = 4.35% or about 4%.

In addition to saving 17 million lives annually, there are further justifications for annual taxation of accumulated wealth at the level of about $10-$15 trillion per year as set out below. The fundamental argument is that we are prepared to waste $10 trillion annually on mounting Carbon Debt associated with dangerous greenhouse gas pollution in a carbon-based economy, about $10 trillion annually linked to evil violence, and $15 trillion annually on the risk management-based cost of 17 million annual avoidable deaths – so why not extract $16 trillion annually from the ultimate perpetrators of these evils for the humane cause of stopping the Global Avoidable Mortality Holocaust?

1. $10 trillion annual Carbon Debt. An upwardly revised estimate of world annual greenhouse gas (GHG) pollution that takes the impact of methanogenic livestock production into account is of 63.8 billion tonnes CO2 –equivalent (CO2-e) pollution annually [8]. It has been estimate by leading climate change economist Dr Chris Hope from 90-Nobel-Laureate Cambridge University that a Carbon Price of $150 per tonne CO2-e is required for effective action on climate change [9]. Continued climate change inaction means that the effective Carbon Price is about $0 per tonne CO2-e and hence that the World’s carbon-based economy is running up an annual Carbon Debt of $150 per tonne CO2-e x 63.8 billion tonnes CO2-e = $9.6 trillion per year. It is appropriate that this annual Carbon Debt increase should be matched by an annual wealth taxation of circa $10 trillion per year.

2. $9.4 trillion annual cost of violence. Violence and war in particular are utterly evil in devastating, traumatizing, maiming and killing. Expenditure on war is utterly misplaced. However the 2014 Global Peace index has estimated that “The total economic impact of containing violence is estimated to be US$9.46 trillion in 2012” [10]. The richest countries in the world in terms of per capita income include those with the worst records of invading other countries. Thus the US has invaded 70 nations [11], the UK about 170 [12] and France has invaded 80 countries [13]. The US, the UK and France are world leaders in ownership of global wealth, in arms sales, and in invasion and occupation of other countries since 1945 and in the 21st century. Accordingly, a wealth tax of circa $10 trillion annually would be justified in view of the immense cost of wealth-linked violence.

3. $15 trillion cost of 17 million annual avoidable deaths The risk avoidance-based Value of a Statistical Life (VOSL) is about $9 million per person in the US (annual per capita income about $53,100) [14] and one could arguably set the VOSL for citizens of Cuba (annual per capita income about $6,300) and for poorer countries at about 10 times less or about $0.9 million per person. There are 17 million avoidable deaths annually in the Developing World (minus China) on Spaceship Earth with the rich in charge of the flight deck. Any individual human life is priceless but one could conservatively estimate a VOSL-based cost of this carnage at $0.9 million per person x 17 million avoidable deaths annually = $15.3 trillion or about $15 trillion. Accordingly a wealth tax of about $15 trillion annually would be an appropriate response to the huge inequality–based Global Avoidable Mortality Holocaust killing 17 million people annually.

Conclusions.

The Global Avoidable Mortality Holocaust involves the avoidable deaths of 17 million people each year from deprivation and deprivation-exacerbated disease. Yet the example of Cuba shows that with an annual per capita income of about $6,000 and peace, high female literacy, good primary health care and good governance it is possible to achieve zero avoidable mortality and very low infant mortality similar to the best in the world.

The cost of bringing impoverished Developing countries (excluding China) up to a Cuban level of annual per capita income is estimated to be $16 trillion annually and this can be achieved through a circa 4% annual wealth tax of the kind proposed by French economist Professor Thomas Piketty for reasons of democracy and economic sustainability.

Clearly peace, high female literacy, good primary health care, good governance, and additional wealth would promote rational economic growth (notably renewable energy-based growth to avoid the mistakes of the West), reduced population growth and paradoxically, more opportunities for further wealth creation by the One Percenters. Indeed one could envisage the global wealth tax to stop the Global Avoidable Mortality Holocaust would rapidly transmute to a more modest wealth tax to ensure democracy and economic sustainability in a vastly more humane, just, equitable and happy world.

At another level, young people in the prosperous West and indeed worldwide are being remorselessly disempowered by the obscene wealth accumulation of the dominant One Percenters and top Ten Percenters and are being burdened by a Carbon Debt that is currently increasing at the rate of $10 trillion annually. Young people everywhere should demand a carbon-free economy and a wealth tax for intergenerational justice, humanity and democracy [15]. Please discuss this with all your friends.

References.

[1]. Gideon Polya, “Body Count. Global avoidable mortality since 1950” that includes a n avoidable mortality-related history of every country since Neolithic times and is now available for free perusal; on the web: http://globalbodycount.blogspot.com/ .

[2]. Thomas Piketty, “Capital in the Twenty-First Century” (Harvard University Press, 2014).

[3]. UN Population Division, World Population Prospects, 2013 Revision: http://esa.un.org/unpd/wpp/unpp/pan... .

[4]. “List of countries by GDP (nominal) per capita”, Wikipedia: http://en.wikipedia.org/wiki/List_o... .

[5]. “List of countries by population”, Wikipedia : http://en.wikipedia.org/wiki/List_o... .

[6]. “Richest 1 percent owns 46 pct of global wealth – Credit Suisse”, ” Reuters, 9 October 2013: http://in.reuters.com/article/2013/... .

[7]. Credit Suisse, “Global wealth report 2013”: http://images.smh.com.au/file/2013/... .

[8]. Robert Goodland and Jeff Anfang. “Livestock and climate change. What if the key actors in climate change are … cows, pigs and chickens?”, World Watch, November/December 2009: http://www.worldwatch.org/files/pdf... .

[9]. Dr Chris Hope, “How high should climate change taxes be?”, Working Paper Series, Judge Business School, University of Cambridge, 9.2011: http://www.jbs.cam.ac.uk/media/asse... .

[10]. Institute for Economics & Peace, “2014 Global Peace Index”: http://www.visionofhumanity.org/#/p... .

[11]. Gideon Polya, “US has invaded 70 nations Since 1776 – make 4 July Independence From America Day”, Countercurrents, 5 July 2013: http://www.countercurrents.org/poly... .

[12]. Jasper Copping, “British have invaded nine out of ten countries – so look out Luxembourg . Britain has invaded all but 22 countries in the world in its long and colourful history, new research has found”, Telegraph, 4 November 2012: http://www.telegraph.co.uk/history/... .

[13]. Gideon Polya, “President Hollande and French invasion of privacy versus French invasion of 80 countries since 800 AD”, Countercurrents, 15 January, 2014: http://www.countercurrents.org/poly... .

[14]. Timothy Taylor, “Value of a statistical life. 9.1 million?”, Conversable Economist, 22 October 2013: http://conversableeconomist.blogspo... .

[15]. “Climate justice & intergenerational equity”: https://sites.google.com/site/300or... .



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