In my last post, I wrote about the race for the presidency in Mexico that contrasts two different views of the economy--a traditional view that growth of any kind is good, with the possibility of benefits trickling down to the masses, and the populist view that privileges for the ultra-rich should be curtailed and growth should be directed to aid the poor. Interestingly, the United Nations Department of Economic and Social Affairs has also concluded that countries should work towards broad-based growth that addresses poverty and unemployment and integrates the poor into society.
The United Nations Department of Economic and Social Affairs issued a booklet in 2005 called "The Social Summit: Ten Years Later." It revisits the Copenhagen Declaration and Programme of Action adopted in 1995 at the World Summit for Social Development, targeted towards developing a "society for all" in a world where globalization seemed to be creating growth benefits for unequal socieites where the gap between rich and poor was widening and the good life was bypassing millions who lived in extreme poverty. Ten years later, the report notes a consensus that globalization has ignored vital links between poverty, unemployment and social dysfunction.
The tenth anniversary reaffirmed the objectives of the Copenhagen Declaration and recommitted the UN members to fostering safe, just, stable societies based on human rights and equality of opportunity. The Declaration based that goal on promotion of a more equitable distribution of opportunities, income, assets, services and power to achieve greater equality in society. The Summit concluded that the best policies are those that empower people. A good society cannot be attained while large numbers of people live in poverty. The Summit recognized that "striving to equalize the distribution of income and wealth and minimizing structural inequities was complicated by both inequality before the law (that is, the inability to exercise rights and participate fully as citizens) and inequality of opportunity and conditions (that is, the inaccessibility of means and resources considered necessary to overcome structural social, economic, political, cultural, ethnic, and racial barriers)." Id. at 7-8. To achieve equal access to employment, specific actions are needed to enhance opportunities for specific groups, including women. To achieve social integration, policies need to focus on strengthening participation and involvement of civil society in decision-making processes, especially for underprivileged members of society.
Perhaps of most interest here, the UN concluded that all three of these goals--eradication of poverty, equality of employment opportunity, and social integration--require an "enabling environment founded on a framework of equity and equality." Id. at 7. And at the bottom of this must be a legal framework and tax system that provide a fair set of rules. The U.N Summit called for a progressive tax system with efficient and fair tax collections.
The United States should pay attention to the lessons from inequality in developing countries around the world and to these conclusions from the United Nations' review of the problems of poverty and unemployment. One reason our country has done so well may have been the shocks of the Great Depression and World Wars I and II, which leveled the playing field by reducing the spread between the rich and poor and the power of oligarchic families. With a more equitable distribution of resources, the US experienced a sustained spurt of growth after World War II, facilitated by the GI Bill's education of a full generation of returning soldiers and a steeply progressive tax system that remained in place after the war to fund societal programs. The broad-based growth was able to "lift all boats", bringing many out of poverty and into the middle class.
Congress should think about our own history, and the conclusions the United Nations has reached about the developing world, before they junk our progressive income tax system in favor of replacement "reforms" like a consumption tax (on wages) or single-rate (flat) income tax.
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